Dangers in suspension of performance of a construction contract

Construction contract
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Wilson –v- Kinsella, QBD, [2019] 1 WLUK 2006, Westlaw

Facts

Mr Wilson was building various works to Mr and Mrs Kinsella’s domestic property.  The parties fell out over progress and value; Wilson stated that he was not prepared to do any more work until he was paid at least £4,000 from an outstanding balance of £10,000.  The Kinsellas informed him that he was in repudiatory breach of his contract, that they accepted that repudiation, and that the contract was therefore over.

Was Mr Wilson in the right and entitled to sue for loss of profit on the remainder of the works? Or had he failed, in gross breach of contract, to perform his obligations and therefore had repudiated the contract?  This would expose him to a claim for damages for non-completion.

Held

Mr Wilson was in breach of this contract, he had no common law right to suspend the work, but rather should have carried on performing, while pursuing his remedies through the court for non-payment.

Comments

  1. This case reminds us that although statutory right to suspend was created by section 112 of the Construction Act 1996, the right to suspend does not exist otherwise in common law; and the new right only applies to “contracts for construction operations”.
  2. By section 106, however, none of the Construction Act provisions apply to “residential occupiers”. So unless there is a written contract between householder and builder which creates a right to suspend, there is no such right. You may instead need to consider termination.

For more specialist legal advice contact our Construction & Engineering team.