I found a very interesting case about contractual liability that I’d like to share with you:
Salvage Assoc’n v’s CAP, 1995
March 1987: Salvage Association contracted CAP Financial Services to develop specs for an accounting system
July 1987: specs delivered & accepted
Further contract for CAP to implement the specified system by May 1988
However, delays & problems emerged… Errors were found in the specification…
Problems with telecoms link…
Key staff left project…
CAP proposed “re-analysis & re-design” , Salvage organised an independent review
Consultants said CAP plan was impossible
Salvage terminated & filed for damages…
Salvage went to court and claimed damages of £800,000 to recover costs, also claiming CAP’s liability limitation clause (£25,000) was unfair
The judge ruled for Salvage:
Salvage were justified in terminating contract – it was clear CAP could not deliver a system
CAP’s limitation clause breached the Unfair Contract Terms Act 1977 – any such limitation had to be reasonable; CAP’s wasn’t.
do you think judge made a good decision?
In my point of view the judge made a good decision due to CAP did not act in terms of the contract and they had to examine the software before sell or implementing in other organization, but also salvage should ask Consultants befor accepting the contract , do you agree?
u r doing nice job,thanks for sharing!
ReplyDeleteThank you dear hamed , it's my pleasure:)
ReplyDeletein IT world, every organization that develop software specially Financial software have to examine the software before sell or implementing in organization,that in developing life cycle IT man call it Testing Software Modules and Analysis parts. i think the judge made right decision!
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