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Oral Contract Existed as a Matter of Fact

When a decision is made as to what the facts are in a particular case, the judgment regarding those facts is normally accepted as not being able to be revisited in subsequent proceedings unless it was manifestly unreasonable or unfair, or subsequent evidence is admitted which changes the factual basis.

In a recent case, a building company claimed that an oral contract had been created between it and another company in December 2015 relating to a development of flats and retail premises. It claimed that nearly a quarter of a million pounds was due to it under the contract.

The work was carried out under a standard JCT contract that had been modified by the oral contract. Oral contracts, as well as written ones, are within the ambit of adjudication decisions.

So, when the dispute went to adjudication and the adjudicator ruled that, on the evidence presented, an oral contract had as a matter of fact been created between the two companies, the Technology and Construction Court would not set that decision aside in the absence of compelling evidence that it was flawed.

Oral contracts are fraught with danger. To avoid disputes, it is always better to put any significant contractual terms in writing. Variations to contracts can normally be arranged quickly and easily and provide certainty as to the terms agreed.

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