FAILURE TO EXECUTE FORMAL DOCUMENT DID NOT PREVENT FORMATION OF CONTRACT

Harvey Shopfitters Ltd v ADI Ltd [2003] EWCA Civ 1757 (13 November 2003)

The Court of Appeal in Harvey Shopfitters Ltd v ADI Ltd [2003] EWCA Civ 1757 (13 November 2003), affirmed the decision of Mr Recorder Uff QC ([2003] All ER (D) 129 (Mar)) and held that the parties had entered into a contract to carry out works in accordance with the IFC 84 conditions notwithstanding the fact that no formal document had ever been executed by the parties. Two points of importance emerge from the decision. The first is that contractual documents should not generally be interpreted in isolation; they must be interpreted in their context and here the context demonstrated that the parties intended to be bound by the IFC 84 conditions. The second is that the mere fact that a letter giving instructions to proceed envisages the execution of further documentation does not preclude a court from finding that a binding contract was nonetheless entered into, provided that all the necessary ingredients of a valid contract are present.