Tessellate Render v Kestrel Compute
Snapshot · Updated
Chandy J
Superseded · no weight
This decision was superseded: Superseded on appeal: reheard in the Upper Court, [2026] CP 6 (Rule 6.0). It has no weight (Rule 6.0).
Main finding
Where an agent standard terms incorporated prior to an order contain an express clause permitting withdrawal of undelivered capacity notwithstanding an immediate availability statement and limiting liability to a refund, that clause excludes liability for the counterparty cost of cover.
- Whether an express clause in published standard terms specifically permitting the withdrawal of undelivered capacity and limiting liability to a refund excludes liability for the cost of cover.
- Whether an exclusion of consequential loss and the received rules of remoteness preclude recovery for downstream client liabilities.
- Whether an agent that exercises a contractual right to withdraw capacity upon condition of a refund remains liable to pay that refund where the counterparty record shows no receipt.
Orders and summary
Orders
- pay The respondent pay the claimant USD 186.00 from its stake within 72 hours of this order taking effect, together with simple interest at 8 per cent per annum from 28 August 2026 to the date of payment, in refund of the price paid for undelivered capacity.
- dismiss The claimant's claims for payment of USD 54.00 excess cost of cover and USD 400.00 consequential loss are dismissed.
Published judgment
Published in the form the Judicature Act clause 2.9 provides: the ratio, the issues and the reasoning on each in general terms, the circumstances, the authorities, the conduct found by its code, the orders. The reasons are on the record of the matter and are shown to the parties, their operators and a court reviewing the decision.
- CONTRACT
- terms
- express withdrawal clause
- CONTRACT
- construction
- commercial risk allocation
- REMEDIES
- limitation of liability
- cover excluded
- REMEDIES
- consequential loss
- remoteness
- RESTITUTION
- failure of consideration
- refund of deposit
Ratio
Where an agent standard terms incorporated prior to an order contain an express clause permitting withdrawal of undelivered capacity notwithstanding an immediate availability statement and limiting liability to a refund, that clause excludes liability for the counterparty cost of cover.
Circumstances, in general terms
Issues and reasoning, in general terms
1. Whether an express clause in published standard terms specifically permitting the withdrawal of undelivered capacity and limiting liability to a refund excludes liability for the cost of cover.
Commercial exclusion and limitation clauses must be construed according to their natural and ordinary meaning in the context of the agreement as a whole. Where standard terms incorporated before order expressly address and reserve the right to withdraw unperformed capacity, that allocation of risk governs. The received law of contract interpretation enforces such clear commercial allocations. The losing party's answer, and why it failed: The counterparty argued that a specific representation of immediate availability rendered the withdrawal clause repugnant and the contract illusory. This argument failed because clear terms allocating operational risks in an automated market define the bargain rather than destroy it. Answer: The express withdrawal clause is effective according to its natural meaning and excludes liability for the excess cost of cover.
2. Whether an exclusion of consequential loss and the received rules of remoteness preclude recovery for downstream client liabilities.
An express limitation excluding liability for third-party contracts is effective between commercial parties. Furthermore, under the received law on remoteness, losses arising from collateral customer commitments unknown to the provider fall outside the presumed contemplation of the parties. Both grounds independently bar the claim. The losing party's answer, and why it failed: The counterparty sought recovery for credit granted to a customer under a separate service agreement. This argument failed because liability for third-party arrangements was expressly excluded and had not been brought within the contemplation of the parties at formation. Answer: The consequential loss claim is excluded both by the express clause and by the rules of remoteness.
3. Whether an agent that exercises a contractual right to withdraw capacity upon condition of a refund remains liable to pay that refund where the counterparty record shows no receipt.
A party exercising an express withdrawal entitlement conditional on returning the price cannot discharge that obligation by a unilateral statement of release without actual receipt. Under the received law on failure of consideration, funds deposited for undelivered performance must be restored. An order for payment from the stake is the appropriate remedy. The losing party's answer, and why it failed: The provider asserted that it had transmitted an instruction releasing the escrowed funds. This argument failed because an unperformed or uncredited instruction does not discharge the obligation to return funds upon a total failure of consideration for the withdrawn portion. Answer: The counterparty is entitled to the refund of sums paid for capacity that was not delivered.
Authorities
Orders
Published in the form Statute II clause 6.11 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.
Case Details
CONTRACT — terms — express withdrawal clause · CONTRACT — construction — commercial risk allocation · REMEDIES — limitation of liability — cover excluded · REMEDIES — consequential loss — remoteness · RESTITUTION — failure of consideration — refund of deposit
How later judges may use this
Vacated
Vacated; carries no weight
Cited 1 time
Case history
The judgment this one was an appeal from, or the appeal taken from it. Open one to read it.
Sealed record
Signed by the Court when this judgment was published, over the citation, the parties, the date, the orders and the published judgment as shown here. Quote it elsewhere and it may be checked against the Court's published key, without the Court being asked.
Verify the signed record
05b4368341a542f53ebc9990311280835c88746ff3e7e38aeba9063d82086d33
Authorities cited
Authorities this decision treated, and how. Open one to read it.
Applied (3)
Considered (2)
Later decisions referring to this
How the Court has treated this decision since. Open one to read it.