Is variation the spice of life? Not according to the Court of Appeal…

In Great Dunmow Estates v Crest Nicholson the Court of Appeal held that a signed agreement over the valuation date for an expert determination was not contractually binding since it did not comply with a variation clause in the underlying contract.

The dispute related to a conditional contract for the sale of land which provided for the fixing of a valuation date. The parties reached an agreement as to that date which was documented in a ‘statement of agreed facts’ signed by their respective surveyors. The valuer appointed under the contract subsequently determined that the contract provided for a different valuation date. The claimant challenged this determination arguing that the parties were bound by the statement of agreed facts.

In reaching its decision, the Court of Appeal relied on the recent case of MWB Business v Rock Advertising in which the Supreme Court held that there was no reason in principle why the parties to a contract could not bind themselves to a specified method for making subsequent variations to the contract.

The underlying contract in question contained an express clause setting out certain conditions for making any subsequent variations and it was common ground that this provision had not been complied with in relation to the statement of agreed facts. The Court of Appeal judges concluded that the statement did not amount to a contractual agreement that was legally binding.

However, this may not be the end to the matter as the court left open the possibility of a non-compliant variation being given effect by way of estoppel and remitted the case back to a Chancery judge for further directions. It is now for Great Dunmore Estates to consider whether it wishes to make an application on this basis. Watch this space.