FIXED PRICE CONTRACTS AND SUBSTANTIAL PERFORMANCE

SWI Ltd v P&I Data Services Ltd [2007] EWCA Civ 663; [2007] BLR 430

In SWI Ltd v P&I Data Services Ltd [2007] EWCA Civ 663; [2007] BLR 430 the Court of Appeal held that a sub-contractor was entitled to claim payment of the contract price despite the fact that it had not carried out all of the work which it was required to perform under the terms of the original contract. The conclusion was held to follow from the fact that the contract was a ‘fixed price contract’ and the sub-contractor had not been in breach of contract: it had done the work requested of it and was entitled to claim payment in accordance with the terms of the contract. The contract itself contained no express term which entitled the contractor to reduce the price payable in the event that the scope of the works was reduced and the Court of Appeal was unwilling, on the facts of the case, to imply such a term into the contract.