Irish Telephone Rentals v. Irish Civil Service Building Society Ltd. [1991] IEHC 1; [1991] ILRM 880 (8th February, 1991)

Irish Telephone Rentals v. Irish Civil Service Building Society Ltd. [1991] IEHC 1; [1991] ILRM 880 (8th February, 1991)

The defects in the telephone system constituted a breach of express and implied terms, depriving the defendant of the contract's intended benefit and discharging it from further performance; clause 11 was a penalty clause and unenforceable, so damages must be assessed on actual loss.

Source-derived case information.

Citation
[1991] IEHC 1
Parties
Plaintiff: Irish Telephone Rentals Limited; Defendant: Irish Civil Service Building Society Limited
Jurisdiction
Ireland
Procedural Posture
Civil / Final Judgment
Outcome
Plaintiff's claim for liquidated damages under clause 11 dismissed; damages awarded based on actual loss for broadcasting contract.
Legal Topics
Breach of Contract, Liquidated Damages, Penalty Clauses, Merchantable Quality, Implied Terms
Contract Law Breach of Contract Liquidated Damages Penalty Clauses Merchantable Quality Implied Terms

Source-derived case record

Summary, issues, holding and outcome

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Parties

Irish Telephone Rentals Limited

Plaintiff

Irish Civil Service Building Society Limited

Defendant

Procedural Posture

Civil / Final Judgment

  1. 1 Whether defects in the telephone and broadcasting systems constituted a breach of contract
  2. 2 Whether the breach discharged the defendant from further performance
  3. 3 Whether clause 11 is a penalty clause or a genuine pre-estimate of loss

Ratio Decidendi

The defects in the telephone system constituted a breach of express and implied terms, depriving the defendant of the contract's intended benefit and discharging it from further performance; clause 11 was a penalty clause and unenforceable, so damages must be assessed on actual loss.

Court Disposition

Plaintiff's claim for liquidated damages under clause 11 dismissed; damages awarded based on actual loss for broadcasting contract.

Orders

  • Plaintiff awarded £2,546.69 for loss of profit and one quarter's rent under broadcasting contract.
  • Plaintiff's claim for telephone contract damages dismissed.