May a contractor or subcontractor decline to start work until satisfactory bank and trade references are supplied?
Seeking references before starting work is sensible, but refusing to perform to force them is dangerous. Without a contract term requiring references, the refusal is a breach.
Not unless the contract requires the references: it makes commercial sense to seek bank and trade references before committing resources, but without an express contractual right to them a refusal to perform in order to force their production is a breach of contract, and if made before performance is due an anticipatory breach, giving the other party a right to terminate, as Miller Fabrications v JD Pierce shows
Not unless the contract requires the references. It makes good commercial sense to seek bank and trade references before committing resources, but without an express contractual right to them a refusal to perform in order to force their production is a breach of contract, and if made before performance is due, an anticipatory breach, giving the other party a right to terminate. In Miller Fabrications Ltd v JD Pierce (Contracts) Ltd a fabricator refused to deliver a mezzanine floor unless bank and trade references were provided, but the contract contained no term requiring them, so the refusal was a material breach entitling the other party to terminate, which it did. The lesson is to make the provision of references an express condition of the contract at the outset, rather than withholding performance to force them once the contract is made.
| No automatic right | No right to insist on references without a contract term |
| Refusal to perform | A refusal to perform to force references is a breach |
| Anticipatory breach | If made before performance is due, an anticipatory breach |
| Miller Fabrications | A refusal to deliver without a references term was a material breach |
| The fix | Make references an express condition of the contract at the outset |
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