Persimmon wins commercial contract dispute

Posted 01/07/2009

A dispute between housebuilder Persimmon and former development partner Chartbrook has been resolved after a successful appeal.

Persimmon had been ordered to pay more than £4 million to the developer after they made a profit on a residential contract development in London.

However, the developer argued that the terms of the contract regarding payments had been misinterpreted and that it actually owned just £900,000 to its former partner.

Michael Herman, writer of the Law Central column in the Times, said courts are generally reluctant to get involved in cases involving legally binding commercial contracts.

But he noted that this case shows that what is written in black and white does not always carry a lot of weight in court.

“The House of Lords ruled that in the presence of an error, the court can get out its red pen and fix things,” Mr Herman observed.

This comes after Persimmon announced that it saw a £780 million drop in pre-tax profits in 2008.