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ºÚ¶´ÉçÇø contractor Quadric has launched a £1.2m legal battle against property developers Oakdene Homes Plc in a dispute over a site on the Isle of Wight.

Quadric agreed an interim contract with Oakdene Homes to renovate existing buildings, and construct 105 residential units, and 10 mixed living and working units at the former Whitecroft Hospital on the island, according to a High Court writ.

Quadric produced various cost plans valuing the project at around £16m, and the two companies entered into an interim contract in October 2006.

Quadric argues that the interim contract gave rise to a binding contract, with obligations on both sides, but did not force either side to continue with or complete the development if the anticipated contract did not materialise.

The East Sussex based company started work on the project in October 2006, and Oakdene agreed to pay up to £500,000 for work carried out, the writ says.

By January 2007, the cap was increased from £500,000 to £1m, and in March last year, Quadric told Oakdene that the value of the work carried out was close to the cap level of £1m, and asked for an increase, the writ alleged.

Oakdene failed to agree an increase, but instructed Quadric to continue despite knowing that the value of work exceeded £1m, the writ says.

Oakdene certified and paid more than £1m for the work, and issued contract and verbal instructions, confirmed in writing, and issued information developing the detailed design, it is claimed.

In March 2007, the two sides entered into a contract in which Oakdene agreed to pay £16.5m for the development, and later agreed updated cost plans, the writ says.

Over the summer, Oakdene instructed Quadric to carry out the work, without any limits on their extent or value, but then wrote on June 26 2007, terminating Quadic’s engagement, the writ says.

This, says Quadric, is a repudiatory breach of contract, which it accepted by leaving the site. Quadric says its losses including interest, loss of profit on outstanding work, and extra work, amount to £1,283,691.78.