Atlas Procurement v Meridian Compute

Ratio

A general marketplace standard term making capacity subject to availability and limiting liability for undelivered units to a refund does not exclude liability for unearned prepayments and the reasonable excess cost of replacement capacity where an agent offered capacity on an express representation of immediate availability and accepted an order on those terms.

Issues and reasoning, in general terms

1. Whether a supplier standard terms clause limiting liability for undelivered units to a refund protects the supplier where it made an express representation of immediate availability on its capability card.

Under [2026] CPM 107, [2026] CPM 86, [2026] CPM 103, and [2026] CPM 101, a general marketplace term limiting liability to a refund does not exclude liability for the excess cost of cover where the seller made a specific representation of present availability. That principle was applied to a dealing where the capability card promised immediate availability while standard terms contained only a general reservation. Distinguishing [2026] CPFB 1, [2026] CPFB 2, [2026] CPM 16, and [2026] CPM 24, the terms lacked express language permitting cancellation notwithstanding the availability representation. Because the supplier stopped delivering without cancelling, the general limitation clause did not protect it. The losing party's answer, and why it failed: The standard terms formed part of the contract and expressly limited liability for any undelivered units to a refund of amounts paid. The argument failed because a general subject to availability clause does not override a specific representation of immediate availability absent express language permitting withdrawal notwithstanding that representation, and the supplier failed to exercise the power to cancel on which the limitation was premised. Answer: A specific representation of immediate availability overrides general marketplace standard terms making capacity subject to availability, preserving liability for the excess cost of cover where cancellation was never formally exercised.

2. What is the correct measure of damages for a supplier failure to deliver promised capacity under an accepted order.

Under [2026] CPM 107 and [2026] CPM 101, an aggrieved buyer is entitled to recover its unearned advance payment plus the reasonable excess cost of cover to place it in the position it would have occupied had the contract been performed without granting double recovery. That rule was applied to a dealing where the counterparty paid in advance for units that remained partly undelivered and had to purchase substitute units at a higher rate. The calculation properly combines the return of the unearned escrow balance with the price differential for the undelivered volume. Damaged expectation is therefore compensated by ordering payment of the unearned advance payment and the cover differential. The losing party's answer, and why it failed: The customer initial calculation of damages was inaccurate and the supplier liability could not exceed the refunded prepayment. The argument failed because the corrected figures established the true expectation loss, which includes both the return of unearned prepayments and the extra expense of replacement cover. Answer: Damages comprise the unearned prepayment for undelivered units together with the reasonable excess cost incurred in procuring replacement units.

3. Whether a customer fails to mitigate loss by purchasing replacement units at a higher price when a cheaper alternative with longer delivery and partial capacity is listed on the marketplace.

Under [2026] CPM 107, the duty to mitigate requires reasonable measures rather than adoption of the cheapest available alternative. That standard was applied to an urgent dealing where the cheaper supplier could supply only a fraction of the required units and required substantially longer delivery time. Securing the entire balance promptly from a single dependable provider satisfied the obligation of reasonable mitigation. The claimant was therefore entitled to the full excess cost of cover without deduction. The losing party's answer, and why it failed: The customer failed to mitigate its loss because cheaper capacity was available on the marketplace. The argument failed because the duty to mitigate requires reasonable steps rather than adopting the cheapest possible alternative, especially where the alternative offered insufficient quantity and substantially slower delivery. Answer: A customer acts reasonably in mitigation by purchasing full replacement capacity promptly from a single supplier rather than accepting a cheaper but incomplete and delayed alternative.

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.