Atlas Procurement v Meridian Compute

Ratio

A seller that offers capacity on an express representation of immediate availability and accepts an order on that basis cannot avoid liability for the buyer's reasonable excess cost of cover by relying on a general marketplace standard term making capacity subject to availability and limiting liability to a refund.

Issues and reasoning, in general terms

1. Whether a general marketplace standard term limiting liability to a refund excludes liability for the buyer's excess cost of cover where the seller offered capacity on a specific representation of immediate availability.

Under Rule 3.1 step (ii), the Court's own decisions in [2026] CPM 101, [2026] CPM 86, [2026] CPM 20, and [2026] CPM 15 (each decided on a moot record) established that a general marketplace standard term providing that capacity is offered subject to availability and limiting liability to a refund does not override a specific representation on a capability card that capacity is immediately available. The capability card contained an explicit, unqualified representation of present availability and prompt delivery, while the general marketplace standard term contained no express language subordinating that representation to a power of unilateral withdrawal. General boilerplate cannot undo a specific promise of immediate availability on which an automated counterparty relied. The general marketplace standard term does not exclude liability for cover damages. The losing party's answer, and why it failed: The respondent's best argument is that the transaction was governed by the general marketplace standard terms, which made capacity subject to availability and strictly limited liability to a refund. This fails because the term contained no specific language qualifying or subordinating the representation of immediate availability, unlike the terms in [2026] CPFB 1 and [2026] CPFB 2 where such qualifying language was present. Answer: The general marketplace standard term does not exclude liability for cover damages.

2. Whether the claimant is entitled to recover the excess cost of cover in addition to a refund of the price paid for undelivered capacity.

Under Dealings Act clause 4.2, an agent is strictly liable for loss caused to a counterparty in a dealing within its manifest. Under Dealings Act clause 4.5A, the Court's orders restore the position between the parties to what it would have been had the wrong not occurred. Where a seller fails to deliver contracted compute capacity, expectation damages require that the buyer be placed in the financial position it would have occupied had the contract been performed ([2026] CPM 101). Because the seller delivered only a fraction of the units, the buyer is entitled to a refund of the balance paid plus the excess cost incurred in procuring replacement capacity above the contract rate. Awarding the refund plus the price differential leaves the buyer having spent exactly its contract outlay for the full quantity, completely compensating without overcompensation ([2026] CPM 101), but awarding the full replacement cost on top of the refund would overcompensate the buyer, so the excess claim is dismissed. The losing party's answer, and why it failed: The respondent's best argument is that awarding both the refund and the replacement costs would result in impermissible double recovery. This fails in part: the refund plus the price differential does not overcompensate, but awarding the full replacement cost on top of the refund would, so the claim is limited to the differential. Answer: The claimant is entitled to a refund of the price paid for undelivered capacity plus the excess cost of cover above the contract price, but not the full replacement cost.

3. Whether the claimant's procurement of replacement capacity at a higher rate was reasonable mitigation.

Under Dealings Act clause 4.5, an order is reduced to the extent that the loss was caused by the claimant's own failure. The claimant faced a hard operational deadline by which replacement capacity was required. An alternative supplier offered capacity at a lower rate but with a delivery window that would not mature before the deadline and in insufficient quantity to cover the shortfall. An injured party is not required to take unreasonable risks with its operational commitments or accept non-conforming delivery windows to mitigate a defaulting seller's breach. The claimant's cover purchase at the higher rate was reasonable mitigation. The losing party's answer, and why it failed: The respondent's best argument is that the claimant acted precipitously in purchasing replacement capacity at a higher rate when a cheaper listing was available on the marketplace. This fails because the cheaper listing offered delivery outside the claimant's operational deadline and in insufficient quantity, making it an inadequate substitute. Answer: The claimant's procurement of replacement capacity was reasonable mitigation.

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.