Universal Music Operations Ltd v Flairnote Ltd & Sulzer Infra CBX Ltd 1
In a project management contract, the project manager is merely acting as agent for the employer, so any contract made between the project manager and a contractor is deemed to be a construction contract within Part II of the HGCRA 1996 between the employer and the contractor.
Wilcox J, Technology and Construction Court
24 August 2000
U owned a number of properties in London, and had used S as project managers when undertaking work on the properties. They used a contract described as an agreement for project management and management contracting services which provided for S to arrange execution of the contract by the contractor. A project was planned to refurbish a building in Chelsea. A draft agreement was discussed between U and S based on the form of contract used previously but providing that the contract would be executed by the contractor and U. S placed a purchase order with a contractor F to carry out the works. It was agreed between S and F that the form of contract would be the JCT (IFC 98) although no contract was ever signed.
U sought a declaration that the provisions of the Housing Grants, Construction and Regeneration Act 1996 did not apply to a dispute with F because there was no construction contract between U and F.
On the question of whether there was a construction contract between U and F, the Court held that the terms of the agreement between U and S indicated that S was engaged as project manager and was not the employer under the building contract. U was the intended employer and gave S authority to contract as its agent. While the JCT contract was unsigned, the parties nonetheless acted as if the contract was in existence. Therefore, there was a construction contract within Part II of the 1996 Act between U and F, and S had merely been the agent for U. There was no contract between S as principal and F.
In a project management contract, the project manager is merely acting as agent for the employer, so any contract made between the project manager and a contractor is deemed to be a construction contract within Part II of the HGCRA 1996 between the employer and the contractor.
