That’s Settled Then – Or Is It?

To avoid costly and time consuming litigation and preserve goodwill parties to construction contracts often do deals at the end of projects resolving matters, so that they can draw a line under how much is due to the Contractor and move on to the next job. Such deals are usually recorded by means of a Settlement Agreement.  The devil is often in the detail in such agreements, and great care needs to be taken to ensure that they capture what you think they do and leave the parties with sufficient remedies.

A recent court case from May this year, Point West London Ltd v Mivan Ltd (2012) serves as a salutary warning that in one project the phrase "full and final settlement in respect of any and all outstanding matters" was, on the facts, sufficient to release a contractor from liability to pay damages in respect of defects which both sides knew about in its work at the date of the Settlement Agreement, but which had been left unresolved.