Content area
Full Text
Introduction
As long ago as 1856 when the Law of Contract was developing, judges recognised the importance of a "condition precedent". The case of Pym v. Campbell [1856] 6 E & B 370 is an early example of the importance of a condition precedent in law. The case featured a Mr Pym who invented a "crushing, washing and amalgamating machine" and entered into negotiations with Mr Campbell to sell a one eighth share of the machine's patent. Mr Campbell agreed to purchase the one eighth share with the proviso that the machine was to be approved by a third party engineer. An agreement was drawn up in writing and signed by both parties; however the requirement of the engineer's approval was not included in the written agreement. The third party engineer refused to give his approval, therefore Campbell refused to pay and was subsequently sued by Pym.
The Court found in favour of Campbell stating that the approval of the engineer was a condition precedent to the contract. As [2] McKendrick (2009, pp. 168-9) stated "a condition precedent provides that a contract shall not become binding until the occurrence of a specified event". This is an important legal concept and a sometime trap for the unwary.
Modern case law considered
A more modern example of a condition precedent than that in Pym v. Campbell can be found in C.J. Sims v. Shaftesbury [1991] 60 BLR 94. This is also a useful case to explore as it involves construction work.
In this case Sims started construction work on a project after receiving a letter of intent from Shaftesbury but before an actual contract was signed between the parties. Work carried on and negotiations continued but no contract was ever entered into. The letter of intent stated that should no agreement be reached then the contractor would be entitled to reimbursement of costs which "must be substantiated in full to the reasonable satisfaction of our quantity surveyor".
Sims claimed £1,090,038 plus VAT as the cost of carrying out the works from Shaftesbury. However the claimant (Sims) was not entitled to make a claim until the quantity surveyor certified the amount owed ([1] Adriaanse, 2010).
The judge held that the requirement for the quantity surveyor to substantiate the...