BSkyB wins Dispute – Fraudulent Misrepresentation

by Kidd Rapinet on February 9, 2010

Be careful what your salesmen say! In a recent important court case the court looked at a perennial issue of salesmen conning customers about what was on offer to induce them to sign the contract.

Philip Astles, a partner in Kidd Rapinet’s Slough office, says “In most consumer and business to business contract negotiations the issue of enforceability of clauses excluding and limiting liability raises its ugly head. Most of those involved with contract drafting know that it is not possible under English law to exclude liability for fraudulent misrepresentation. In a long awaited High Court Judgment in January 2010, which runs to over 400 pages, a judge has held that exclusion clauses are void and that BSkyB has won its fight against EDS over an allegedly failed IT system. The Customer Relationship Management system was defective in the buyer’s view and BSkyB’s legal costs between 2007 and 2009 alone ran to £40m. EDS probably spent as much but, with £700m at stake, those costs are chickenfeed.

“One of the witnesses for EDS claimed to have an MBA from Concordia College and described the buildings where he had attended lectures. BSkyB’s QC produced a certificate in court which the main witness accepted as from that organization. The QC could prove he had bought it online for his dog Lulu. The College did not exist and the witness lost his job the day after he gave evidence. However, it is the detailed examination of legal issues on exclusion of liability which are of interest in the judgment.”

When did you last have your clauses excluding liability in contracts checked by a lawyer? Are they reasonable enough to be valid under the Unfair Contract Terms Act 1977? Do you ensure you do NOT exclude liability for fraud? If you exclude it the entire clause can be void.

Call Phil Astles on 01753 532541 for further information.