The decision in Sumpter v Hedges is a leading English contract law authority dealing with the consequences of partial performance under a lump sum contract and the limits of recovery on a quantum meruit basis. The case arose in the context of a building contract and addressed whether a contractor who abandons work before completion can recover payment for work done or benefits conferred.
The case is particularly important for clarifying the distinction between situations where an employer has a genuine choice whether to accept incomplete work and situations where the employer is left with no realistic alternative. It also reinforces the principle that a lump sum contract creates an entire obligation, meaning payment is conditional upon completion unless a new agreement can be inferred.
Facts of Sumpter v Hedges
In Sumpter v Hedges, Mr Sumpter was a builder who entered into a contract with Mr Hedges to construct two houses and stables on Mr Hedges’ land. The agreed price for the work was a lump sum of £560. During the course of performance, Mr Sumpter completed work valued at £333 but later informed Mr Hedges that he was unable to continue because he had no more money.
Substantial payments on account had already been made to Mr Sumpter. He left the buildings unfinished and abandoned the contract. Some building materials belonging to Mr Sumpter were left on the land. Mr Hedges, faced with incomplete structures on his property, proceeded to finish the buildings himself, using the materials that had been left behind.
Mr Sumpter subsequently brought an action seeking to recover the outstanding money. He argued that he should be paid either for the value of the work he had completed or on a quantum meruit basis for the benefit that Mr Hedges had obtained.
At first instance, Bruce J found as a fact that Mr Sumpter had abandoned the contract. The judge held that Mr Sumpter was entitled to payment for the value of the materials used by Mr Hedges but not for the building work itself.
Legal Issues
The central issues before the Court of Appeal in Sumpter v Hedges were:
- Whether a builder who has abandoned a lump sum contract before completion is entitled to recover any part of the contractual price for partial performance.
- Whether, in the absence of completion, the builder could recover payment on a quantum meruit basis for work done or benefits conferred on the landowner.
These issues required the Court to consider established principles relating to entire contracts, abandonment, and the circumstances in which a fresh contract may be inferred.
Sumpter v Hedges Judgement
The Court of Appeal dismissed Mr Sumpter’s claim for payment for the building work and upheld the decision that he could only recover the value of the materials used by Mr Hedges.
Lump Sum Contract and Entire Obligation
The Court emphasised that where there is a contract to do work for a lump sum, the contract price cannot be recovered until the work is completed. Since Mr Sumpter had abandoned the contract, he could not recover any part of the agreed lump sum under the original contract.
AL Smith LJ stated that the law was clear: partial performance of a lump sum contract does not entitle the contractor to payment unless the work is completed. The finding of abandonment was decisive, as it meant that the builder had chosen not to perform his contractual obligations.
Quantum Meruit and Fresh Contract
The Court then addressed the alternative claim for recovery on a quantum meruit basis. It held that, for such a claim to succeed, there must be evidence from which a fresh contract to pay for the work already done can be inferred.
In Sumpter v Hedges, the Court found no such evidence. Mr Hedges had not elected to accept the incomplete work in a way that suggested an agreement to pay for it. Instead, he was left with unfinished buildings on his land and had no real choice but to complete them. The mere fact that he completed the work and remained in possession of his land could not justify the inference of a new contract.
AL Smith LJ relied on the authority of Munro v Butt and distinguished cases such as Lysaght v Pearson, where circumstances allowed a new contract to be inferred. He also referred to Pattinson v Luckley, emphasising that work done on land differs from goods sold and delivered, as possession of land does not imply acceptance of incomplete work.
Concurring Judgements
Chitty LJ agreed with the reasoning and conclusion. He stressed that there was no conduct on the part of Mr Hedges from which a fresh agreement to pay for the work could be inferred. The fact that a landowner completes unfinished work on his own land does not amount to acceptance of partial performance.
Collins LJ also concurred. He explained that, although there are situations where abandonment may still allow an inference of a new contract, this is only possible where the defendant has an option to take or reject the benefit of the work. In this case, the nature of work done on land meant that Mr Hedges had no such option. The unfinished buildings could not simply be rejected or removed, and completing them was a practical necessity rather than a voluntary acceptance.
Conclusion
The ruling in Sumpter v Hedges confirms that abandonment of a lump sum contract prevents recovery of the contract price and severely limits the availability of quantum meruit claims. The Court of Appeal made it clear that the mere completion of unfinished work by a landowner does not amount to acceptance of partial performance or evidence of a fresh contract.
By insisting on completion or clear evidence of a new agreement, Sumpter v Hedges protects contractual certainty and prevents defaulting contractors from benefiting from their own failure to perform. It remains a foundational case in English contract law on partial performance, restitution, and the limits of unjust enrichment.