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The defendant, Steria, terminated the agreement with Peregrine Systems alleging that it was entitled to terminate the contract between the parties as a result of delays and commercial misstatements. Steria also claimed damages from Peregrine.

In return, Peregrine brought proceedings against Steria for money owed under the contract. Initially, the Court held that Peregrine had not committed any breach of contract and that there had been no misstatements. The Court also held that Steria had in any event lost the right to terminate the contract because Steria had, by its conduct, affirmed the contract by continuing to use the software. Steria appealed these decisions.

The Court of Appeal decided against Steria on both as follows:

Due to the wording of the contract Peregrine was only obliged to provide '200,000 worth of services and was not required to fully implement the software. Once Peregrine had provided '200,000 worth of services, there was no obligation to do anything more to complete the project within a reasonable time;
A supplier having to perform 'within a reasonable time' does not necessarily mean that the customer can end the contract if this is not done;
Steria had not properly communicated its dissatisfaction to Peregrine; and
Steria continued to use the software and so acted in a manner implying Steria's wish to affirm the contract.
Comment : This case highlights the importance of contractual parties clearly setting out their rights and responsibilities when entering into an IT contract. Furthermore, parties should act properly when dissatisfied with goods or services and analyse contractual documentation carefully before deciding to terminate an IT contract.

If you require further information contact us at enquiries@rtcoopers.com

? RT COOPERS, 2005. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances

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RT Coopers Solicitors, solicitors, solicitor, EMPLOYMENT LAWYER, redundancy, redundancy law, legal advice, law, legal, lawyers, LAWYER, employment law, employment lawyers, employment law advice, employment solicitors, employment tribunal, employers, employees, Sex Discrimination, Discrimination Claims, Unfavourable treatment, race discrimination, racial discrimination, Unfair Dismissals, law firm, FIRM, Sex discrimination, data protection, Sexual harassment, maternity rights, Maternity and Paternity Disputes, Outsourcing Contracts, Senior Executive Appointments and Service Agreements, Suspensions, Tribunal Claims, bringing a claim to the employment tribunal, TUPE Transfers, Redundancy, Breach of Contract Disputes, Employment Contracts, Staff Handbooks, Wrongful dismissals, Contract Drafting, Contract Dispute, Equal Pay, Right to Equal pay, contracts, Contract Disputes. lease contact us for more information: enquiries@rtcoopers.com or visit our website at www.rtcoopers.com/practice_employment.php

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