St Albans City and District Council v ICL [1996] EWCA Civ 1296 (26 July 1996)

St Albans City and District Council v ICL [1996] EWCA Civ 1296 (26 July 1996)

The defendant breached an express contractual obligation to supply software fit for purpose; the limitation of liability clause failed the reasonableness test under the Unfair Contract Terms Act 1977; the plaintiff could recover only those losses not recouped from chargepayers, specifically the net additional payments made, but not sums later recouped via increased charges.

Citation
[1996] EWCA Civ 1296
Parties
Plaintiff (respondent): St Albans City and District Council; Defendant (appellant): International Computers Limited
Jurisdiction
England and Wales
Judgment Date
26 July 1996
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal allowed in part
Legal Topics
Breach of Contract, Damages, Limitation of Liability, Implied Terms, Software Supply, Unfair Contract Terms Act 1977, Fitness for Purpose
Contract Law Commercial Law IT Law Breach of Contract Damages Limitation of Liability Implied Terms Software Supply +2 more

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Parties

St Albans City and District Council

Plaintiff (respondent)

International Computers Limited

Defendant (appellant)

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether the defendant breached an express or implied contractual obligation to supply software fit for purpose
  2. 2 Whether the limitation of liability clause was effective under the Unfair Contract Terms Act 1977
  3. 3 Whether the plaintiff could recover all or part of its losses as damages, including sums recouped from chargepayers

Ratio Decidendi

The defendant breached an express contractual obligation to supply software fit for purpose; the limitation of liability clause failed the reasonableness test under the Unfair Contract Terms Act 1977; the plaintiff could recover only those losses not recouped from chargepayers, specifically the net additional payments made, but not sums later recouped via increased charges.

Court Disposition

Appeal allowed in part

Orders

  • Award to plaintiff reduced by £484,000 and related interest for 1991/92; plaintiff entitled to interest on £484,000 for 1990/91; all consequential matters to be dealt with at a further hearing.