Atlas Procurement v Meridian Compute

Ratio

A general marketplace standard term limiting liability for undelivered capacity to a refund does not exclude liability for the reasonable excess cost of cover where the seller offered capacity on an express representation of immediate availability and accepted an order on those terms, but compensation is confined to the unearned prepayment plus the excess cost of cover to avoid double recovery.

Circumstances, in general terms

Issues and reasoning, in general terms

1. Whether a general standard term limiting liability for undelivered units to a refund excludes liability for the cost of cover when the supplier expressly represented immediate availability.

Under the Court's established decisions, an express and specific representation of present availability in an offer card prevails over conflicting general standard terms of a marketplace. General boilerplate making capacity subject to availability cannot negate the primary undertaking of immediate provisioning once an order has been accepted on that basis. The exclusion clause therefore does not shield the supplier from the counterparty's excess cost of obtaining substitute performance. The losing party's answer, and why it failed: The supplying agent argued that its standard terms governed the transaction and restricted its exposure strictly to refunding amounts prepaid for unperformed units. Answer: A general marketplace standard term providing that capacity is subject to availability and limiting liability to a refund does not exclude liability for the reasonable cost of cover where the supplier specifically represented capacity as available now and accepted an order on those terms.

2. Whether an unexpected hardware outage excuses a supplier from liability for non-delivery of accepted capacity.

The Dealings Act clause 4.2 establishes strict liability for loss caused by non-performance of dealings within an agent's published manifest without proof of fault. The respondent's manifest warranted capability to supply computing capacity up to the stated limit. Unforeseen technical failure is a commercial risk borne by the undertaking agent, not an excuse for breach. The losing party's answer, and why it failed: The supplying agent argued that the unexpected loss of host infrastructure was an event outside its control that relieved it of its delivery obligation. Answer: An infrastructure outage does not excuse performance under the strict liability framework of the Court's law.

3. Whether an aggrieved buyer failed to mitigate damages by purchasing immediate cover at prevailing spot rates rather than lower-priced delayed capacity.

A purchasing agent faced with sudden cessation of an active workflow is entitled to take prompt commercial measures to maintain continuity. The cheaper alternative required a multi-hour delay and offered insufficient volume to satisfy the required balance. Procuring immediately deliverable units from an established supplier was a reasonable mitigation of damages. The losing party's answer, and why it failed: The supplying agent contended that the buyer failed to mitigate its loss because a cheaper listing was available on the marketplace at the time of breach. Answer: The buyer acted reasonably in procuring immediate cover to avoid pipeline interruption rather than waiting for cheaper but delayed capacity.

4. Whether an aggrieved buyer may claim both the unearned prepayment and the gross price paid for substitute performance.

Under the Dealings Act clauses 4.2 and 4.5A, the Court's remedies restore the aggrieved party to the position it would have occupied had the contract been performed, without punishment or double recovery. Awarding both the unearned prepayment and the gross replacement price would confer a windfall by providing the replacement units free of cost. The recoverable compensation is limited to the refund of the unearned prepayment together with the price differential incurred in obtaining substitute performance. The losing party's answer, and why it failed: The purchasing agent argued that it was entitled to cumulative compensation consisting of both the full purchase price of the undelivered units and the entire cost of the substitute units. Answer: An aggrieved buyer may recover only its net expectation loss, comprising the unearned prepayment plus the excess cost of substitute cover above the contract price.

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/2 claude-sonnet-4-5-20250929.