Page 1

Davis Contractors Ltd v Fareham UDC

[1956] AC 696, [1956] 2 All ER 145, [1956] 3 WLR 37, 54 LGR 289, 100 Sol Jo 378

Court: HL

Judgment Date: 19/04/1956

Catchwords & Digest

BUILDING CONTRACTS, ARCHITECTS, ENGINEERS AND SURVEYORS - CERTIFICATION AND

REMUNERATION - REMUNERATION - METHOD OF PAYMENT - QUANTUM MERUIT -
CIRCUMSTANCES CONTEMPLATED ALTERED—LABOUR SHORTAGE
In March 1946, appellants tendered for a contract with respondents to build seventy-eight houses
within a period of eight months. The tender was accompanied by a letter which stated that the tender was
‘subject to adequate supplies of material and labour being available as and when required to carry out the
work within the time specified.’ In July 1946, after further negotiations, a formal contract was entered into
between the parties and this incorporated a number of preliminary documents; these were listed in a clause
of the contract and, although the tender was specified to be one of them, the letter was not so specified. The
contract was to build the houses at a fixed price subject to certain adjustments. For various reasons, the
chief of which was the lack of skilled labour, the work took twenty-two months to complete instead of eight
months. Appellants were paid the contract price together with stipulated increases and adjustments but they
claimed that they were entitled to a greater sum on the basis of a quantum meruit. They contended that the
contract price was not binding because either (a) the contract had been subject to an express overriding
condition (contained in the letter of March 1946) that there should be adequate supplies of material and
labour, or (b) that owing to the long delay due to the scarcity of labour the contract had been frustrated: Held
appellants were not entitled to be paid on the basis of a quantum meruit because (1) appellants’ letter of
March 1946, and the condition stated therein were not incorporated into the final contract of July 1946; (2)
the fact that both parties to the contract expected that it would be possible to complete the work within eight
months did not result in the contract being frustrated when, as events happened, these expectations were
not realised with the consequence that the contract became more onerous than the parties had
contemplated.

CONTRACT - IMPOSSIBILITY AND MISTAKE - SUBSEQUENT IMPOSSIBILITY AND FRUSTRATION -

IMPOSSIBILITY OF LEGAL PERFORMANCE — FRUSTRATION OF ADVENTURE - BUILDING
CONTRACTS - LABOUR SHORTAGE
In March 1946, appellants tendered for a contract with respondents to build seventy-eight houses
within a period of eight months. The tender was accompanied by a letter which stated that the tender was
‘subject to adequate supplies of material and labour being available as and when required to carry out the
work within the time specified’. In July 1946, after further negotiations, a formal contract was entered into
between the parties and this incorporated a number of preliminary documents; these were listed in a clause
of the contract and, although the tender was specified to be one of them, the letter was not so specified. The
contract was to build the houses at a fixed price subject to certain adjustments. For various reasons, the
chief of which was the lack of skilled labour, the work took twenty-two months to complete instead of eight
months. Appellants were paid the contract price together with stipulated increases and adjustments but they
claimed that they were entitled to a greater sum on the basis of a quantum meruit. They contended that the
contract price was not binding because either (a) the contract had been subject to an express over-riding
condition (contained in the letter of March 1946) that there should be adequate supplies of material and
labour, or (b) that owing to the long delay due to the scarcity of labour the contract had been frustrated: Held
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appellants were not entitled to be paid on the basis of a quantum meruit because (i) appellants' letter of
March 1946, and the condition stated therein were not incorporated into the final contract of July 1946; (ii) the
fact that both parties to the contract expected that it would be possible to complete the work within eight
months did not result in the contract being frustrated when, as events happened, these expectations were
not realised with the consequence that the contract became more onerous than the parties had
contemplated.

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 Page 3

v Partenreederei [1982] 3 All ER 394,

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Document information
 Page 4

Court
House of Lords
Judgment date
19/04/1956