Binding Effect of an Unsigned CCDC 17

at trial; its unsigned CCDC 17 bound it by conduct alone. ATAC LAW acted for the trade contractor, which left the project a net payer after most of its claim was dismissed.

The Dispute

A formwork company took on the architectural concrete work for a multi-building residential development. The job it thought it had priced was smaller than the job the owner expected, and once other trades fell behind its crews were waiting on site instead of pouring. It billed for the difference, the owner refused, and within months it was off the site with a labour supplier suing it.

The Parties’ Positions

The trade contractor contended that its agreement was its own quotation, a scope schedule and nine pages of marked drawings, delivered the day before it mobilized and accepted by the construction manager’s email the next morning. On that footing the balcony planter walls fell outside the contract, and the additional wall contact footage it installed sounded in a claim for extras. It claimed further for unpaid progress draws, for damages for wrongful termination, and for delay measured by a window analysis setting the three months it had estimated against the eight it spent on site.

The owner submitted that the agreement was the CCDC 17 stipulated price contract its construction manager drafted after a site-trailer meeting at which the two settled both scope and price, and which the trade contractor answered by email reading “looks good”. That contract called for considerably more work, including planter walls on balconies between the ground floor and the roof of each building. The owner relied on GC 6.1.2, under which “the Trade Contractor shall not perform a change in the Work without a Change Order or a Change Directive”. It relied also on GC 6.6.1, obliging a party intending to claim to give “timely Notice in Writing of intent to claim”. It counterclaimed that the lien the trade contractor had filed against the project, in an amount approaching the entire fixed price, was an abuse of process, and claimed in the alternative under the Builders Lien Act.

The Court’s Decision

The court found the CCDC 17 to be the agreement, the trade contractor having approved it by email, raised nothing afterward, and carried on working. Work that contract contemplated could not sound in a claim for extras, and the trade contractor had not shown which wall contact footage lay outside its scope, or that it had given adequate notice. The claims for that footage, for unpaid draws and for wrongful termination were dismissed, the last on a finding of repudiation; the trade contractor recovered only on changes and rework, and on delay, reduced for overlap between the two.

The owner recovered its carrying cost on the lien funds, the lien being an abuse of process, and part of what it paid to complete the work. The awards against the trade contractor exceeded what it recovered, so it left the project a net payer, costs remaining to be spoken to.

Key Lessons for Trade Contractors and Owners

• Treat email approval of a draft contract as execution. An unsigned contract can bind a party that approves it by email, raises nothing further, and proceeds with the work, since what the parties agreed is determined from their conduct.
• Reconcile the scope schedule in the executed contract against the quotation before mobilizing. In this matter the work CCDC 17 contemplated could not be claimed as extra compensation, so a quotation narrower than the contract that supersedes it turns priced work into unpaid work.
• Serve written notice of intent to claim before performing work regarded as a change. CCDC 17 requires a Change Order or Change Directive before a change in the Work, and timely written notice of intent to claim, which Canadian courts generally treat as a condition precedent to recovery.
• Size a lien to the amount realistically recoverable in construction litigation. A lien registered in an amount disproportionate to what the claimant can reasonably hope to recover may be found an abuse of process, exposing it to the owner’s carrying cost on the funds posted to clear title.

The outcome of this matter turned on the contract the parties reached, the terms of CCDC 17 and the evidence before the Supreme Court of British Columbia at trial. A similar dispute may resolve differently.

ATAC LAW acts for owners, construction managers, trade contractors and suppliers in construction disputes at trial, in arbitration and in mediation.