08 September 2017 - Post by:Damien Ryan
In Vinci Construction v Beumer the High Court confirmed its reluctance to find contractual terms void for uncertainty.
Vinci was engaged to carry out construction works at Gatwick airport. It subcontracted a portion of those works to Beumer. The subcontract contained sectional completion dates and liquidated damages if those completion dates were missed as set out in this table:
|Section||Description||Subcontract completion date||Amount per day|
|1||Design submission A||14 December 2012||£19,000 / calendar day|
|2||Design submission B||16 September 2013||£25,000 / calendar day|
|3||Temporary Stand Provision||N/A||N/A|
|4||Pier & Airfield||N/A||N/A|
|5||Baggage||12 May 2015||£22,500 / calendar day|
|6||Remaining Works||27 May 2015||£17,000 / calendar day|
There was no definition in any of the subcontract documents of “Baggage” or “Remaining Works”. The drawings showing the layout of the works did not contain sufficient information from which to identify the works in each section. Vinci sought declaratory relief as to the proper construction of the subcontract to enable it to claim for delay. Beumer argued that the provisions were so uncertain as to be void.
The High Court reiterated that courts are reluctant to find a provision void for uncertainty, particularly where the contract had been performed. The parties, by including a particular provision, must be presumed to have intended it to have some effect (Whitecap v Rundle). A contract will only be void for uncertainty if the court cannot reach a conclusion as to what was in the parties’ minds ‘or where it is not safe for the court to prefer one possible meaning to other equally possible meanings’ (Arnhold v AG of Hong Kong (1989) 47 BLR 129)
The focus of the dispute was whether the disconnection of baggage equipment fell under Section 5 or Section 6. It was rational that disconnection would not occur until the new system was operational. Any dispute as to the necessity for any particular disconnection to make the new system operable would be capable of resolution based on factual and/or expert evidence. It was not an issue that rendered the delay provisions conceptually uncertain. The court’s view was consistent with the timing and sequence of other works and the contract diagrams for those works were not inconsistent with the court’s view. These conclusions made the works falling within Section 6 sufficiently identifiable and certain so that the delay provisions were enforceable.
The decision emphasises the distinction between provisions which are vague or imprecise, on the one hand, and those which are conceptually unsound, on the other. It shows a willingness not only to inquire into the intentions of the parties but to extend the logic of those intentions by drawing inferences from the surrounding facts so as to build an enforceable, contractual framework. In the words of Rix LJ, cited by the court, ‘…that is certain which can be rendered certain…’