Barry B. Sookmanbsookman@mccarthy.ca416-601-7949

McTet2 #3697855

Toronto ComputersLawyers GroupJune 26, 2007

The Year in Review(2006-2007)

Contracting and E-Commerce Issues

Remedies for Breach of OutsourcingAgreements

Vertex Data Science Ltd v Powergen Retail Ltd

[2006] EWHC 1340 (Comm)

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Vendor seeking to prevent customer from terminating a BPO outsourcingcontract where fees payable would be £1.1 billion over 10 years, where soletermination fee was £11.5 million and limit of liability was £12 million.

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“In these circumstances I do not consider that it is appropriate to grantinjunctive relief which will have the effect of compelling the parties to worktogether. Nor do I consider that the terms of the contract are sufficientlyprecisely defined to indicate to Powergen precisely what is required of it if it isnot to prevent or hinder Vertex from performing its functions under the MSA…”

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“These sophisticated parties included in their contract clause 11 which excludesliability for loss of profit, loss of contract and loss of goodwill and imposes a capon each party's liability in the aggregate sum of £12 million. Of course there willbe issues as to the proper construction and applicability of these provisions andVertex also contends, somewhat implausibly as it seems to me, that they areunfair and as such unenforceable. However that may be, it is not immediatelyobvious to me that it would be unjust for Vertex to be confined to such remedyin damages as is determined to be the extent of the bargain which it struck.”