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Module name |
Law for Surveyors |
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Level |
7 |
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Module start month and year |
September 2024 |
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Module pass mark |
50 |
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Assignment |
1 |
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Assignment due time and date |
10.00 a.m. (UK time), Monday 9 December 2024 |
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Word count (see section below for info) |
3,000 |
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Assignment weighting |
60% |
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Module learning outcomes assessed |
LO2, LO3 (see ‘Assessment’ page in ‘Module orientation’ for details) |
If you have any questions about this assignment, please contact your Module Team using the Assignment forum in the relevant ‘Assessment preparation’ week on the VLE.
Scenario
You are a surveyor on the staff of a well-known established consultancy K Morris LLP. Your client, International Hotel Holdings plc (IHH), is the owner and operator of the ‘The Pilgrim Hotel’, a large, luxury hotel located in City of Chester, UK. Your client recently appointed a contractor known as Gray’s Contracting Limited (GCLP) to undertake a major refurbishment of The Pilgrim Hotel.
A brief pre-commencement site meeting was held to discuss the works, but no contract was formalised between IHH and GCLP. As GCLP have worked with your client previously without issue for many years, a contract was not considered to be necessary.
The contractor had progressed works to the satisfaction of your client until a recent design team meeting held midway through the project. At that meeting IHH confirmed that as GCLP had overvalued their previous application for payment, your client intends to deduct the overpayment from the contractors next payment application. At the same meeting, GCLP responded to suggest that far from overvaluing the previous payment application, your client had in fact significantly undervalued the same application.
Chartered surveyors from both organisations hold urgent talks to try to rectify the situation but fail to make progress on this issue and a wide range of other complex technical points relating to structural alterations and mechanical and electrical services. GCLP threatens to suspend all works imminently if the matters cannot be resolved swiftly due to cashflow related problems. The parties wish to settle matters and make progress with the remaining works as quickly as possible. The parties are now engaged in an ongoing dispute.
Your client cannot tolerate a significant delay to completion of the refurbishment of the hotel. IHH is under financial pressure to re-open the luxury hotel for the holiday season and has been receiving negative publicity on social media and in local press.
To move forward, your client considers that their only remaining option is to take matters to court to reach a resolution.
Task
Use your knowledge of the law of contract and dispute resolution methods to write a report that advises your client, IHH, on the enforceability of their agreement with GCLP together with the most appropriate method(s) that could be used to resolve the points in dispute between the parties.
When preparing your report you should:
- Use legal principles to outline the elements that must be present to form a legally binding contract;
- Use your knowledge of contract formation to critically examine whether a legally binding agreement has been formed between the parties using appropriate legal principles;
- Examine the scenario facts to reach reasoned conclusions as to the most effective form(s) of dispute resolution available to IHH in the context of the presented scenario.
Sample Answer - Plagiarised
Use legal principles to outline the elements that must be present to form a legally binding contract
Report on Contract Enforceability and Dispute Resolution for International Hotel Holdings plc (IHH)
Introduction
This report aims to advise International Hotel Holdings plc (IHH) on the enforceability of its agreement with Gray’s Contracting Limited (GCLP) regarding the refurbishment of The Pilgrim Hotel. Additionally, it will evaluate the most appropriate dispute resolution methods to address the ongoing issues between the parties. Understanding the legal principles surrounding contracts and dispute resolution mechanisms will assist IHH in avoiding costly delays while ensuring the timely completion of the project.
1. Enforceability of Agreement Between IHH and GCLP
1.1 Elements of a Legally Binding Contract
For a contract to be legally enforceable, several key elements must be present:
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Offer and Acceptance: A valid contract requires a clear offer by one party and unambiguous acceptance by the other. In this case, while no formal contract was signed between IHH and GCLP, it appears that an implicit agreement was made based on prior discussions and past working relationships.
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Consideration: Both parties must exchange something of value. Here, GCLP agreed to undertake refurbishment work, and IHH agreed to compensate them for those services. The consideration was in the form of services provided by GCLP and monetary payments made by IHH.
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Intention to Create Legal Relations: The parties must have intended to enter into a legally binding agreement. Given the nature of the refurbishment project and the financial stakes involved, it is likely that both IHH and GCLP had a clear intention to create legal relations, even without a written contract.
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Certainty of Terms: A contract must contain certain and unambiguous terms. In this case, although no formal contract was signed, the work to be carried out was discussed, and both parties acted in accordance with those discussions until the current dispute arose. This suggests that some terms were agreed upon, albeit informally.
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Capacity: Both IHH and GCLP have the legal capacity to enter into contracts, as they are corporate entities engaged in commercial activities.
1.2 Implied Terms and Customary Practices
Given the long-standing relationship between IHH and GCLP, it is possible that customary practices and implied terms formed the basis of their agreement. Courts can enforce such agreements, even in the absence of a written contract, if there is evidence that both parties have been acting in accordance with their previous dealings and industry standards.
Continued...
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