Oral contract confusion leads to retrial

Maggs v Marsh and others (Court of Appeal - 7 July 2006)

Mr Marsh employed Mr Maggs to refurbish his house, having accepted a written estimate for £36,500. During the course of the works, Mr Marsh instructed extra works but no price was agreed. After the works were complete, a dispute arose regarding the sum owed to Mr Maggs.

Mr Maggs' final invoice, along with a list of omissions and extras, valued the works at £70,000. Mr Marsh disputed this and Mr Maggs issued proceedings. A year later, after advice from a quantity surveyor, Mr Maggs increased his valuation to £126,000.

At trial, the parties agreed that the contract was partly oral, partly written but gave conflicting evidence as to the items that were included in the original contract price. The judge preferred Mr Maggs' evidence. Mr Marsh sought to refer to Mr Maggs' list of extras as a guide to what Mr Maggs believed to be true extras. The judge held he was bound by Miller v Whitworth (1970) and could not take into account what the parties said or did after the contract was formed.

The Court of Appeal held the judge was wrong to exclude that evidence. The principle set out in Miller only applies to written contracts. The accuracy of the parties' recollections about the terms of an oral contract may be tested against things said or done after the contract has been concluded. Accordingly, a retrial was ordered.

COMMENT

This case highlights the difficulties that can arise when parties have not made a complete written record of the contract terms. A dispute as to the terms of an oral or partly oral contract may only finally be resolved by detailed consideration of witness and documentary evidence at trial and evidence of subsequent conduct is admissible to determine the parties' original intentions. - Zita Mansi, BLM London.

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have an Insurance Post account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: