Philp & Anor v Cook

Philp & Anor v Cook

Clause 8.3 of the SPA, properly construed, extinguishes the underlying liability for breach of warranty unless notified in proper form within 2 years of the sale. This precludes the buyer from relying on alleged breaches of warranty as an equitable set-off against the sellers' indemnity claim. The contractual limitation is not merely procedural but substantive, and applies equally to set-off as to a free-standing claim.

Parties
Appellant/claimant/seller: Elaine Philp; Appellant/claimant/seller: Robert Irving; Respondent/defendant/buyer: Lesley Joan Cook
Jurisdiction
England and Wales
Judgment Date
28 November 2017
Procedural Posture
Civil Appeal (contract/indemnity) / Appeal From Refusal of Summary Judgment
Outcome
appeal allowed; summary judgment granted for the sellers
Legal Topics
Indemnity, Breach of Warranty, Set Off, Contractual Limitation Clauses, Notification Provisions
Contract Law Commercial Law Indemnity Breach of Warranty Set Off Contractual Limitation Clauses Notification Provisions

Case Brief

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Parties

Elaine Philp

Appellant/claimant/seller

Robert Irving

Appellant/claimant/seller

Lesley Joan Cook

Respondent/defendant/buyer

Procedural Posture

Civil Appeal (contract/indemnity) / Appeal From Refusal of Summary Judgment

Legal Issues

  1. 1 Whether the contractual limitation clause in the SPA precludes the buyer from relying on alleged breaches of warranty as an equitable set-off against the sellers' indemnity claim
  2. 2 Whether the failure to notify a claim within the stipulated period extinguishes the underlying liability or merely bars the remedy

Ratio Decidendi

Clause 8.3 of the SPA, properly construed, extinguishes the underlying liability for breach of warranty unless notified in proper form within 2 years of the sale. This precludes the buyer from relying on alleged breaches of warranty as an equitable set-off against the sellers' indemnity claim. The contractual limitation is not merely procedural but substantive, and applies equally to set-off as to a free-standing claim.

Court Disposition

appeal allowed; summary judgment granted for the sellers

Orders

  • The buyer is precluded from relying on alleged breaches of warranty as an equitable set-off.
  • Summary judgment is entered in favour of the sellers for the indemnity claim.