Construction focus: Oral contracts – Emma Swan writes for Property Law Journal
In the latest Forsters contribution to the Property Law Journal, Construction Associate, Emma Swan, warns against the use of oral contracts in order to avoid uncertainty.
This article was first published in Property Law Journal 397 (May 2022) and is also available on lawjournals.co.uk.
In her article, titled ‘Construction Focus: The unwritten rule’, Emma discusses how numerous contractors, developers and consultants rely on oral contracts due to either time constraints regarding the completion of paperwork, (occasionally misplaced) trust between parties, or the instance that subsequent variations of written contracts are agreed orally.
A key difficulty with oral contracts and oral variations is that it is difficult to prove what has actually been agreed between parties if there is a disagreement about the terms of the agreement. To highlight this point, Emma goes on to reference the key provisions of the Construction Act 1996 and highlight the risks involved when parties rely solely on an oral contract.
She concludes that clearly setting out the terms at the beginning of a contractual relationship, parties to a construction contract can effectively protect themselves as far as possible against the headache of having to retrospectively attempt to persuade a court of what was originally agreed between parties.
Oral contracts, more often than not, cause ambiguity and can lead to expensive and time-consuming disputes that could have easily been avoided by the existence of a clear written contract.