Steering clear of trouble – tips to avoid problems with your classic car restoration or race preparation

If you are thinking of having your classic car restored or race prepared etc, then this guide will help identify common problems and provide suggested solutions.

1. Understand who you are contracting with

There is a flourishing support industry for owners of classic cars in this country and a wide choice of restorers and race-preparers (in the remainder of this guide they will be collectively referred to as the “engineer” or “engineers”). Naturally different engineers will offer different quality services and charge varying prices. Before you entrust custody of your precious automobile to anyone, you must carry out due diligence to satisfy yourself that they are reputable and will look after it properly.

A cursory check of a website will tell you very little. Instead you should ask for references/testimonials (and follow them up), seek details of the engineer’s insurance coverage and security measures (especially if your vehicle is going to be held in a workshop or other storage facility for any period of time). If you can visit the premises of your chosen engineer all the better, but failing this you ought at least to speak to the owner of the business to help make your decision.

2. Get it in writing

No doubt you will have outlined your requirements (and possibly even your budget) to the engineer when seeking estimates for the work you require to be carried out. If you are happy with the engineer’s response, do not be tempted to conclude matters on a handshake. Instead it is important that your contract with the engineer be recorded in writing. As a minimum, the written contract should confirm what services are being provided to you, how the services will be charged and how long the job should take. Setting out these basic terms will at least help ensure that both you and the engineer know what your respective responsibilities are during the course of the project.

However, if you are dealing with a reputable and well organised engineer it is likely that you will be presented with their standard form contract to sign. Such a document will make provision for a host of other matters besides the basic terms highlighted above – for example, the engineer may have reserved the right to seek interest on late payments from you or perhaps will also seek to exclude or restrict his liability to you if things go wrong. Normally a standard form contract will have been prepared by a lawyer to protect the interests of the party producing it and to limit the rights of the “consumer” (i.e. you). It is obviously important to read and understand the small print carefully before you consider signing anything. Normally standard form contracts will include a “jurisdiction and law” clause and no doubt an engineer based in England will make sure that this clause specifies that the laws of England will apply to the contract and that any dispute must be litigated in the English Courts. As a result you ought to take legal advice from a qualified English lawyer on the meaning and effect of the terms you are being asked to accept.

You may have no choice but to accept the terms offered to you by your chosen engineer, but if circumstances are favourable you may be able to negotiate a bespoke contract with the engineer which is rather more favourable to you. Set out below are some of the matters which it would be useful to include within any agreement with your engineer (whether in a bespoke agreement or as a side agreement to any standard form contract you have signed).

3. Monitoring

It will be important for your peace of mind to be kept informed as to progress with the work on your automobile. Regular monitoring will also keep your engineer on his toes and not let the quality of his work or the agreed timetable slip. Most reputable engineers will welcome their clients into their workshops to check on progress and if the project is to run as smoothly as possible there ought in any case to be regular dialogue between you and your engineer.

You ought to establish at the outset what level of monitoring you wish to have and check that your engineer is receptive. Be wary of those engineers who would prefer to keep you in the dark or who only get in touch with you when sending you their latest invoice.

Once you have an agreement over how you will monitor progress, make sure that the contract with the engineer records this. Where possible you should specify within your agreement what consequences should follow if the engineer fails to comply with his reporting obligations to you as an added incentive for the engineer to keep you informed over the whole course of the work.

4. How to deal with the unexpected

No two restorations or race preparations are the same and it is impossible to anticipate and plan for every eventuality which may arise during either process. It will be important to ensure that your agreement with the engineer contains terms which dictate how unexpected contingencies should be dealt with. For example, if it becomes evident that extra work will need to be undertaken once a restoration project has begun, the contract should cater for this and perhaps provide that no “extra” work is to be carried out until you have agreed to a written scope for such work and the budget involved.

Often an engineer will not be able to identify the full extent of the work which might be needed at the outset and so he will couch his remit in vague terms. Even if this is necessary you should not be providing the engineer with licence to carry out whatever work he sees fit. Instead the contract should require the engineer to confirm the scope of the work (and its cost) as soon as reasonably possible following early investigations and you should only be liable to pay for work which you have given approval to be carried out.

5. Disputes

Problems may arise as work on your project proceeds, but if you have a competently drafted contract and have been actively monitoring progress with the work, hopefully you will be in a good position to pick up on any dispute early and resolve it before it becomes larger and more difficult to resolve.

Your contract with the engineer ought to set out a process for the quick and effective resolution of disputes. Such a clause may specify that before issuing any claim at Court the parties must seek to resolve the dispute by employing a means of alternative dispute resolution such as:

  • mediation – a process of negotiation using a neutral third party to assist each side come to a voluntary agreement); or
  • arbitration – a process in which a neutral third party makes a decision which is binding on the parties.

These processes are designed to resolve disputes quickly and without recourse to expensive litigation and can be adopted by the parties voluntarily if they are not set out in the contract.

6. Liens and the power of sale

The major concern of the engineer will be to get paid on time and in full. If the engineer has your vehicle (or any of its parts) in his custody then under English law the engineer has a right to claim a lien over these items until he has been paid and this can be a useful tool in prompting payment.

Moreover, if the threat of holding the vehicle does not produce payment from the customer, then English law provides a mechanism whereby the engineer can sell the items he holds which belong to his customer in order to meet the outstanding charges.

However, the power of sale is limited to those situations where the customer has not raised a dispute about charges. In practice therefore the power of sale arises very infrequently as customers will generally have a reason for non­payment and very often this will be because they wish to challenge the size of an invoice and/or the quality of the workmanship involved. However, even though an engineer may not be able to sell the items he holds, he can still exercise the lien while his invoices remain unpaid.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.  If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.