Hello, my name is Ben and it is my pleasure to assist you with your question today.
Please note that as a practising solicitor I am often in and out of meetings, travelling, or even at court when I pick your question up. This may even occur at evenings and weekends. Therefore, I apologise in advance if there is a slight delay in getting back to you. Rest assured that I am dealing with your query and will respond ASAP. You do not have to wait here and you will receive an email as soon as I have responded. For now please let me know if a formal contract was agreed between the parties?
only a verbal promise ,the works start early next week and we wish to give them notice today
What is the usual arrangement in such situations - do you tell a subcontractor there is potential work, they then price that and you then decide whether to accept it or not?
yes as above we decide if we will accept their price or not
ok many thanks, I will get back to you this afternoon with my full advice
do you have an answer yet to my question
Many thanks for your patience. The key in this situation is whether it can be demonstrated that a legally binding contract was entered into, because if that was the case the other party would be able to argue that you have potentially acted in breach of that contract and enable them to seek compensation for damages.
It is not necessary to have a written contract in place to have a legally binding agreement and a verbal contract can also exist. However, before one can claim that a contract existed, they must show that there was an offer, acceptance, intention to create legal relations and consideration.
An offer is generally viewed as one party being prepared to enter a contract on certain terms. The acceptance is the other party's clear agreement to those terms, with the requirement that both parties actually intend for this to be a formal agreement.
Instead of making an offer, a party can actually make an 'invitation to treat', which is different to an offer and would not result in a legally binding agreement. A common example of when an invitation to treat is likely to be inferred by a court is if one party is merely trying to commence negotiations. So in your case if what you had done is invited the subcontractor to give you a price for the work to be carried out, that can be just an invitation to treat and they would have then subsequently got back to you with an offer which you could accept or reject.
However, if there were no negotiations due and everything was agreed and due to start next week, it is more likely that a legal contract would have been in place and by cancelling it now you could potentially be sued for compensation for damage. Whether they actually sue you is another matter, but if they do and are successful then the compensation could cover things like lost business, although only for a limited time and not for the full period as they would be expected to mitigate their losses and look for replacement work straight away.
I hope this has answered your query. Please take a second to leave a positive rating, or if you are unhappy for some reason with the advice - please get back to me and I will assist further as best as I can. Thank you very much