HM Insights

What happens when you fall out with your builder, but don't have a contract?

One of the most common types of legal dispute that can arise is where people engage a builder directly to build them a house. The complexities, costs and potential for things to go badly wrong mean that it’s fertile ground for disputes. 

Once things have started to unravel and the relationship between the person who wants the house built ('the employer') and the builder ('the contractor') has soured the next call is often to a litigation solicitor.  The conversation often starts a little like this: "I have fallen out with my builder but I don’t have a contract."

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Forming a construction contract

People think that contracts are written on parchment with a quill pen before being witnessed and then stamped with a wax seal. Most contracts don’t require that much formality. Apart from contracts that relate to dealing with heritable property (buying and selling land or leases), contracts don’t even need to be in writing. Having said that it is clearly better if they are and there are a whole range of suitable 'off the peg' Scottish building contracts that can be obtained from the Scottish Building Contracts Committee (SBCC) to suit the circumstances.     

Contracts are formed in a variety of different ways and sometimes don’t even need any words at all; the classic example is the person who jumps on a city bus and puts the required change into the chute or card onto a reader. Often people don’t say a thing. The ticket (or your bus pass) will direct you to the operator's terms and conditions of carriage and in those circumstances the bus company has contracted to carry you to your stop in exchange for your payment.   

What the law requires to form a contract is that there is a meeting of minds or 'consensus in idem'.  Essentially, that there is mutual understanding of what has been agreed. In most online interactions you probably don’t read the very lengthy terms and conditions (although you should) before clicking 'yes'.  In that situation you are still deemed to be bound by the conditions of the contract. 

What has been agreed?

Philosophically a true meeting of minds is not considered possible as one individual sees the world differently from another. So how the law deals with that is not to concern itself with what people think they agreed but what they actually agreed. In a dispute where there is a written agreement the court will focus on the ordinary meaning of the words used. But, to go back to where we started - what if there is no written agreement? The first task for the lawyer then becomes to figure out what was agreed?   

What was agreed can be pieced together between; conversations, quotes, orders, emails, actions, invoices, payments and other behaviours (i.e. acting or even failing to act). Then you can start to build a picture as to what the builder was instructed to do and what the price was. Fortunately for those who have not reduced their agreement to writing, the law imposes certain duties on the builder when carrying out their work (implied terms). For example, a builder is obliged to complete 'the works' in a 'good and workmanlike manner' and the law has built up rules for what that actually means.    

Breach of construction contract

If there is a contract, has there been a breach? Inevitably in complicated builds there will be some minor defects at the end of a build which require to be corrected. Those issues are called 'snagging'.  As the word implies, those issues are usually small things that require a bit of extra attention to correct. They do not, of themselves, amount to a breach of contract. For a breach to be 'material' (sufficiently serious for the law to consider the contract has been broken) it has to be a defect or error that goes to the heart of the agreement.     

Understanding your construction contract

So, while it is clearly preferable to document your contract with your builder in writing and with all due formality (preferably with a recognised pro forma Scottish building contract), as discussed here all is not lost if you don't have a written contract. What you have agreed ought to be capable of being discerned one way or another but it will take time. If you have yet to enter into a contract it is better still to take advice and engage a building professional to also manage the contract on your behalf. 

If you find yourself trying understand your position and need to discuss who is to blame for defective works or latent defects, or to try to understand what was actually agreed where there is no written contract (or interpret the terms of a contract if there is a binding written agreement), you will need the help of a solicitor who has experience of those issues. We can help you understand these complexities, whether before or after you enter into a building contract.

Get in touch – we're here to help

Please contact a member of our team to discuss any problems arising before, during or after your building project; whether or not you have a formal contract in writing.