Success in JCT Subcontract Adjudication using Promissory Estoppel
The full £276,782.61 awarded, with statutory suspension rights upheld and 100% of adjudicator’s fees payable by the main contractor.
The background
Optimum Resolution acted for a specialist groundworks subcontractor in a fiercely contested adjudication concerning payment under a JCT subcontract for a major retail project.
The client had delivered complex concrete framed building and groundworks under a re-measurable JCT subcontract, valued at approximately £930,000.
A dispute arose when the main contractor refused to pay £276,782.61 due under the client's Application 7, claiming late submission of the application and reliance on strict contractual terms.
Throughout the project, the main contractor had consistently accepted and processed previous late applications, issuing corresponding Payment Notices and making payments without objection. This established a clear pattern of conduct.
When the contractor sought to treat Application 7 differently, withholding payment without issuing a Pay Less Notice, Optimum Resolution led the adjudication for the subcontractor, advancing a robust argument based on promissory estoppel.
The Adjudication
The case involved:
- Application of promissory estoppel, relying on the contractor’s consistent past conduct of treating late applications as valid
- Enforcement of statutory rights under the Housing Grants, Construction and Regeneration Act 1996 and the Local Democracy, Economic Development and Construction Act 2009
- Defence of the subcontractor’s suspension rights under Section 112 of the Act
- Protection of the subcontractor’s entitlement to the applied-for sum in the absence of a valid Pay Less Notice
Optimum Resolution delivered the full legal strategy, submissions and estoppel argument, defeating the contractor’s technical defence and attempts to reframe the payment mechanism.
The Outcome
The adjudicator awarded decisively in favour of our client:
- Awarding payment of the full £276,782.61 due under Application 7
- Upholding the application as valid and enforceable and rejecting the contractor’s reliance on strict time provisions due to its prior conduct
- Recognising that promissory estoppel applied, the contractor could not resile from its consistent prior behaviour
- Upholding the subcontractor’s statutory suspension rights under Section 112
- Ordering the main contractor to pay 100% of the adjudicator’s fees, confirming our client as the clear successful party
Reflection
This case demonstrated:
- The critical value of understanding and correctly deploying promissory estoppel, a powerful but often underused tool in payment disputes
- The importance of consistent contract administration, with parties who establish a practice cannot later rely on strict contract terms to deny payment
- The ability of a well-prepared subcontractor, with expert support, to defeat aggressive main contractor tactics and protect its commercial entitlement
Optimum Resolution delivered this outcome through strategic legal argument and practical commercial focus, achieving a full recovery for our client.
