Ultra vires contract not enforceable

In School Facility Management Ltd v Governing Body of Christ the King College [2020] EWHC 1118 (Comm) Foxton J held that the claimants were not entitled to bring a claim for damages or in debt under a contract which it had entered into with the defendants for the provision of modular buildings for the defendant College. As a result of the way in which the contract with the College was structured (as a finance lease), the College did not have the capacity to enter into the contract because of its failure to obtain the required consent of the Secretary of State. The case acts as a reminder of the problems that can arise when entering into a contract with a public body in the event that the court concludes that the public body did not have the contractual capacity to enter into the contract. The claims of the claimants in contract and tort failed, although there was some small comfort for the claimants in the form of the dismissal of the counter-claim by the College to recover the payments which it had made to the claimants under the contract and the success of their own unjust enrichment claim in respect of the period between the failure of the College to make payment and the date of judgment.