''St Albans City and DC v International Computers Ltd'' EWCA_Civ_1296
is_an_English_contract_law.html" ;"title="996
EWCA Civ 1296
is an English contract law">996
EWCA Civ 1296
is an English contract law case, concerning unfair terms under the

Unfair Contract Terms Act 1977 The Unfair Contract Terms Act 1977c 50 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most impor ...

. The parties were St Albans City and District, St Albans City and District Council and International Computers Limited.

Facts

A contract to provide software (COMCIS) for the implementation of the

Community Charge The Community Charge, commonly known as the poll tax, was a system of taxation introduced by Margaret Thatcher's government in replacement of domestic rates in Scotland from 1989, prior to its introduction in England and Wales from 1990. It pr ...

("poll tax") of International Computers Ltd limited its liability to £100,000. The software was meant to create a register of tax payers. Because of errors in the software, the loss to the council was £1,313,846. The council claimed breach of contract, and that the liability limitation was unreasonable under the

. International Computers Ltd claimed that the liability limitation should remain.

Judgment

Scott Baker J awarded the full sum because the city council was operating on International Computers Ltd's written standard terms of business and so

UCTA 1977 The Unfair Contract Terms Act 1977c 50 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most impor ...

section 3 applied. Sections 6 or 7 also applied and under section 11 the clause was unreasonable. Under section 11(4) Scott Baker J highlighted that International Computers Ltd had ample resources and had £50m worldwide product liability insurance. Looking at Schedule 2, he said that the council was in a weaker bargaining position because they had financial restraints and were not in the commercial field. They had no opportunities of other contracts without the term. The council knew of the term and made representations about it. He noted (as in '' The Flamar Pride'') that Schedule 2 should be taken into account just as with ss. 6–7. He summed up by saying that the loss of this size is better to fall on the company and not the local population through increased taxes or reduced services. The Court of Appeal upheld Scott Baker J's reasoning, but concluded the damages were in fact £484,000 less.

Notes

{{reflist, 2

References

*'' The Salvage Association v CAP Financial Services Ltd''

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FSR 655, failure to show evidence of why a particular limit is put in may lead to it being unreasonable *'' British Fermentation Products Ltd v Compair''

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2 All ER (Comm) 389, Judge Bowsher QC had some trouble with the ‘written standard terms of business’ line in UCTA 1977 s 3, holding that the industry's model forms of contract did not mean using standard terms, because they were not BFP's own standard terms. English contract case law Court of Appeal (England and Wales) cases 1996 in case law 1996 in British law St Albans City Council

Facts

Judgment

See also

Notes

References