ZLX Ltd against James Mackie Wholsesale Ltd (Sheriff Court Civil) [2024] SCGLA 38 (23 August 2024)

ZLX Ltd against James Mackie Wholsesale Ltd (Sheriff Court Civil) [2024] SCGLA 38 (23 August 2024)

The pursuer failed to prove its pro forma terms and conditions were in existence or incorporated at contract formation. Clauses 3.2, 10.2 & 11 were onerous and unusual, and the pursuer did not take sufficient steps to bring them to the defender's attention. The defender was induced to contract by misrepresentation regarding eligibility for R&D tax relief and scope of financial liability. The contract is vitiated by essential error and any penalty clause is unenforceable.

Citation
[2024] SCGLA 38
Parties
Pursuer: ZLX Ltd; Defender: James Mackie Wholesale Ltd
Jurisdiction
Scotland
Judgment Date
23 August 2024
Procedural Posture
Civil Commercial Contract Dispute / Final Judgment
Outcome
Defender assoilzied; contract reduced ope exceptionis; pursuer's claim dismissed.
Legal Topics
Incorporation of Terms, Onerous and Unusual Clauses, Misrepresentation, Termination of Contract, Penalty Clauses
Contract Law Commercial Law Misrepresentation Incorporation of Terms Onerous and Unusual Clauses Termination of Contract Penalty Clauses

Case Brief

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Parties

ZLX Ltd

Pursuer

James Mackie Wholesale Ltd

Defender

Procedural Posture

Civil Commercial Contract Dispute / Final Judgment

Legal Issues

  1. 1 Whether the pursuer's pro forma terms and conditions, specifically clauses 3.2, 10.2 & 11, were incorporated into the parties' agreement
  2. 2 Whether the defender was induced to enter the contract by misrepresentation
  3. 3 Whether clause 11 constitutes an unenforceable penalty clause

Ratio Decidendi

The pursuer failed to prove its pro forma terms and conditions were in existence or incorporated at contract formation. Clauses 3.2, 10.2 & 11 were onerous and unusual, and the pursuer did not take sufficient steps to bring them to the defender's attention. The defender was induced to contract by misrepresentation regarding eligibility for R&D tax relief and scope of financial liability. The contract is vitiated by essential error and any penalty clause is unenforceable.

Court Disposition

Defender assoilzied; contract reduced ope exceptionis; pursuer's claim dismissed.

Orders

  • Repels pleas-in-law for pursuer
  • Sustains specified pleas-in-law for defender