We are in dispute with a credit hire company over the definition of a contract repair, and the Insurer will not pay our contract repair invoice.  They say that ‘a contract repair is what is estimated’ and want us to repair the vehicle as per the original estimate.

We did not repair the vehicle as per the estimate which would have resulted in the vehicle being written off. We agreed, with the Engineer, to do a ‘Contract Repair’ and repair the vehicle for considerably less than the estimate.

The Customer was notified and agreed to this option because they wanted to keep the vehicle rather than have their vehicle written off. The work provider is refusing to pay because we have not followed the estimate. Can you confirm what is a ‘contract repair’? 
The term ‘contract repair’ is widely used in the body repair industry and can be misleading for those without industry knowledge, perhaps we have identified a training need within the insurer.

Every repair undertaken by a vehicle body repairer is undertaken in accordance with the terms agreed in a ‘contract’. The contract can be oral, written or implied, they are all legally enforceable and as a result every repair therefore could rightly be described as a ‘contract repair’.

However, the term ‘contract repair’ has historically been used within the industry to describe a repair that is undertaken at the sole discretion of the Repairer, where the risk for repairing the vehicle, to a satisfactory standard, rests upon the Repairer. A fixed fee is agreed by the Repairer, and the Repairer is contractually liable for safely repairing the vehicle, for the agreed fee, to the satisfaction of the customer.

It appears from the situation briefly explained that the party authorising the repair is of the opinion that a ‘contract repair’ is essentially a discount off the estimated figure.

This position is incorrect and is not the case.

When a Repairer produces an estimate it is in fact creating an offer to repair the identified damage on the vehicle for approximately the amount recorded in the estimate. This offer can then be either accepted or refused by the Engineer.

If the estimate is accepted the Repairer proceeds with the repair, if additional damage is identified during the repair process a supplementary estimate is created by the Repairer and authorised by the engineer if found to be appropriate.

In the situation identified an estimate was created, but the ‘Engineer’ refused the Repairer’s offer to repair the vehicle for the estimated amount, as it was likely that the vehicle would be written off.

When the offer to repair the vehicle for the estimated amount was rejected, by the engineer, the offer was terminated in law Tinn v Hoffmann & Co (1873) 29 LT 271, 278.

On the information provided it is clear that that it was not the Repairer’s intention to undertake the estimated repair for a discounted price. The fact that it was agreed that the vehicle would be repaired as a ‘contract repair’ demonstrates that a different agreement was entered into.

The agreement entered into between the parties was that of a ‘contract repair’ and the fact that the amount invoiced by the Repairer was considerably lower than the original estimate, demonstrates that the repair method would differ from that set out in the estimate for the previous offer which was rejected.

When undertaking a ‘Contract Repair’ Repairers will often decide to repair a component rather than replace and may even choose to fit non OE or Green Parts to ensure the vehicle can be economically repaired. The Repairer is aware that they are contractually responsible for ensuring the Customer is satisfied with the finished repair and should a Customer complain the Repairer will be required at its own cost to resolve the Customer’s complaint.

What therefore is a ‘Contract Repair’?

Andrew Moody’s* definition of ‘Contract repair’ is as follows

Contract Repair - Both parties agree that the Repairer will undertake a repair to a vehicle for a fixed amount, and that the Repairer can at its sole discretion choose a repair process and method which will enable the vehicle to be repaired to a safe and satisfactory standard for the agreed amount. When a ‘contract repair’ is undertaken the Repairer accepts the responsibility for repairing all the accident related damage for the agreed fixed amount. If having commenced the repair process additional damage, which is a result of the accident, is discovered, the Repairer is also required at its own expense to repair the additional damage.

Note
Customers / Owners of vehicles ideally should be consulted prior to commencing a 'contract repair' and their authorisation sought .RML can provide members with a suggested document which they can use to obtain Customers' authorisation. RML should contact the helpline if they require any further information.

Thinking about joining RML? Contact us on 01832 293003 or email This email address is being protected from spambots. You need JavaScript enabled to view it.
*Andrew Moody is the Managing Director of Retail Motor Law Ltd., a Panel Beater, Motor Vehicle Engineer, Barrister and Solicitor with over 28 years experience in the vehicle body repair industry.