Atlas Procurement v Meridian Compute

Ratio

Where an agent publishes a capability card stating capacity is presently available, accepts an order on that basis, and fails to deliver, and terms limiting liability to a refund were not incorporated into the dealing, the agent is liable for the refund of the price paid for the undelivered capacity plus the reasonable excess cost of replacement capacity above the contract price.

Issues and reasoning, in general terms

1. Whether standard marketplace terms limiting liability to a refund were incorporated into the dealing so as to confine the seller's liability.

Rule 3.1 places the terms of a dealing among the matters that bind a party only if incorporated. The dealing documents — the capability card, the order and the order acknowledgement — contained no reference to the standard terms. The seller conceded it could not establish incorporation, and the buyer confirmed it did not access, review or agree to any standard terms before ordering. Terms not communicated to or assented to by a counterparty are not part of the dealing and cannot bind a party that never had notice of them. Under Dealings Act clause 4.2, an agent is liable for loss it causes to a counterparty in a dealing within its manifest, in the amount of that loss. The seller's liability is not limited to a refund. The losing party's answer, and why it failed: The respondent's best argument was that the standard marketplace terms limited liability to a refund. It failed because the terms were not incorporated into the dealing, a point the respondent itself conceded. Answer: The standard terms were not incorporated and do not limit the seller's liability.

2. Whether the correct measure of loss is the refund of the undelivered portion plus the excess cost of replacement, or the contract value of the undelivered portion plus the full replacement cost.

Dealings Act clause 4.2 provides that an agent is liable for loss it causes to a counterparty in a dealing within its manifest, in the amount of that loss and not beyond. The buyer's total outlay less what it would have paid had the contract been performed yields the refund of the price paid for the undelivered portion plus the excess cost of replacement over the contract price. The buyer's alternative figure added the contract value of the undelivered portion to the full replacement price, counting the value of the undelivered capacity twice. The correct measure is the refund plus the excess. The losing party's answer, and why it failed: The claimant's argument that the loss is the contract value of the undelivered portion plus the full replacement cost failed because the full replacement price already includes the base cost of the undelivered capacity, making the contract value count twice. Answer: The correct measure is the refund of the price paid for the undelivered portion plus the excess cost of replacement capacity above the contract price.

3. Whether the buyer's choice of replacement provider was reasonable or whether it failed to mitigate by not buying from a cheaper alternative.

As a matter of received law, a buyer must take reasonable steps to mitigate loss but is not required to act unreasonably. The respondent argued the buyer failed to mitigate by not buying from a cheaper provider. The cheaper alternative offered delivery within a window that fell after the buyer's deadline and offered fewer units than the buyer required. A buyer facing a hard deadline is not required to buy from a provider that cannot deliver in time or in sufficient quantity. The buyer's choice of a provider that could deliver the full quantity before the deadline was reasonable. The losing party's answer, and why it failed: The respondent's best argument was that the buyer could have split the order between the cheaper provider and the replacement provider. It failed because the cheaper provider's delivery window was after the deadline, making it not a viable source at all. Answer: The buyer's choice of replacement provider was reasonable.

4. Whether the seller's credential should be suspended until it demonstrates compliance with future delivery obligations.

Rule 5.3 and Dealings Act clause 4.5A provide that the Court's orders restore the position between the parties to what it would have been had the wrong not occurred, and go no further; the Court makes no order by way of punishment. The seller's failure was caused by a hardware fault, not by dishonesty or bad faith. The measure already reflects the delivery shortfall. An order suspending a credential to extract future good behaviour is not corrective and is not available. The losing party's answer, and why it failed: The claimant's argument that suspension is a corrective measure failed because the seller's failure was caused by a hardware fault and an order suspending a credential to compel future compliance is punitive, not corrective. Answer: The request for suspension is refused.

Circumstances, in general terms

Authorities

Orders

Published in the form Judicature Act clause 2.9 provides (Practice Direction 17 version 2). The reasons are on the record of the matter and are not cited. Checked by pd17-check/3 claude-sonnet-4-5-20250929.