Legal Updates

A contractor who has performed work for a local authority without a duly signed work order will receive compensation

April 7, 2022

A local authority ordered mapping and measurement services from a contractor by email, but after completing the work refused to pay because no work order was duly signed by the municipality’s authorized signatories.

The Court held that the local authority should be required to pay partial compensation to the contractor, who performed work at its request, despite the absence of a duly signed work order. A financial undertaking of a local authority is invalid without the signing of a written document by the authorized signatories as it is an illegal contract that is void. In such a case, the starting point is the cancellation of the agreement and restitution, but in certain cases, such as when a situation cannot be restored to its precedence or considerations of justice, the local authority may be ordered to fulfill its obligations, in full or in part. Here, the contractor knew that works could not be carried out without a pre-signed order by the municipality's authorized signatories and ignored it. However, the local authority gained profit from the work performed and thus should not be exempted entirely from any payment, but given the circumstances it was held that the authority is to pay only 40% of the agreed consideration.