The Danish Eastern High Court: Contractor terminated contract in e-mail
The contractor wrote in an e-mail to the owner that he was compelled to terminate the contract unless the owner accepted extra work. The owner did not reply and subsequently the parties disagreed about whether the contract was terminated. The Danish Eastern High Court found that the contractor had terminated the contract.
The contractor was to build a house for the owner and demanded that extra foundation work was executed before constructing the house. The owner declined the extra work because the contractor had not given any suggestions or prize for the extra work.
For that reason, the contractor informed the owner in an e-mail that he had one day to accept the extra work. If he did not accept, the contractor had to terminate the contract. The e-mail was copied to the architect who had designed the house.
The owner did not reply to the e-mail. A few days later the architect wrote to the contractor that it was a shame that he had terminated the contract. The architect forwarded his e-mail to the owner. The contractor replied the architect that he could not wait any longer, that he would invoice the work done, and that the architect was right that it was a shame with this outcome.
Subsequently, the owner signed a contract with a new contractor.
The contractor and the owner disagreed about the termination of the contract
Two months later, the contractor gave notice that he would terminate the contract and claim damages if the owner did not accept the extra work. The owner replied that the contractor had already terminated the contract in his e-mail two months earlier.
The contractor disagreed, and at the same time he became aware that the owner had hired a new contractor. Subsequently, the contractor sued the owner.
The contractor was of the opinion that he had only given a notice of termination in the first e-mail. The owner stated that the contractor unjustified had terminated the contract in the e-mail which was confirmed by the contractor’s answer to the architect.
The Danish Eastern High Court: The contractor terminated contract in e-mail
Contrary to the District Court, the Danish Eastern High Court found that the contractor had terminated the contract in his first e-mail to the owner. The Danish Eastern High Court emphasized the wording of the e-mail and the contractor’s answer to the architect. Furthermore, the Danish Eastern High Court noted that the contractor’s behavior after the e-mail correspondence confirmed that he had terminated the contract.
The Danish Eastern High Court found that the contractor’s termination was unjustified and for that reason he could only claim payment for the work that had value to the owner. The value of the work was based on an estimated value made by the court.
In this case, a contractor’s wording of an e-mail and his subsequent behavior was vital to the outcome of the case. In that way, the case illustrates how important it is that one as a contracting party expresses oneself as clearly and precisely as possible. The case also illustrates that importance is attached to the parties’ behavior when the court has to decide the outcome of the case.
IUNO recommends that one always make sure to express oneself clearly and not to threaten with termination unless one really has the intention to do so and termination is actually justified.
[Judgment of the Danish Eastern High Court, 26 June 2014, case B-3530-13]