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In October 2011, Western Airways plc (WAP) acquired Cottingham airport, a small regional airport with a few established scheduled flights and some seasonal charter flights. WAP intends to expand the number of flights from the airport, and in order to prepare for this expansion, has embarked upon a major development programme for the airport terminal, as well as entered into negotiations with several airlines to start offering services from Cottingham airport.
In November 2011, WAP entered into a contract with Hull Construction Ltd (HCL) to undertake the necessary construction works. The terms of the contract required that the works had to be completed by November 2012, in time for what was expected to be a busy Christmas travel season. A term in the contract provided for agreed damages payable to WAP if the works were not completed on time (you may assume that this term is enforceable and does not constitute a penalty clause).
(a) HCL entered into negotiations with CarryAway for the supply and installation of two new luggage conveyor belt systems in the main arrivals hall at the airport. On 4th December 2011, CarryAway’s contract manager sent an email to HCL stating that CarryAway would be able to install the conveyor belt systems by September 2012, and that the total cost would be £125,000. There was a signature (automatically added to every email sent by CarryAway) at the end of the e-mail message stating that “All contracts are entered into on the basis of CarryAway’s standard terms and conditions, accessible via this link” (clicking on the word “link” directs the recipient to CarryAway’s website containing its standard terms and conditions). One of the terms stated that “We are not liable for any loss caused by a delay of less than two weeks from the agreed deadline, and any deadline indicated is approximate only unless a firm deadline is agreed expressly.”
HCL responded by a letter dated 6th December 2011, in which they agreed to the price and stipulated 15 September 2012 as the contract deadline. HCL’s standard terms and conditions were printed on the reverse of this letter, including a term which read “The deadline stated for completion of works is a condition.” CarryAway replied by email, indicating their agreement to the price and deadline stated, and commenced work. The systems were built at CarryAway’s factory before September 2012, but CarryAway discovered it was unable to commence installation work before 15 September 2012. On 5 September, CarryAway informed HCL that installation would commence on 20 September 2012 and take approximately three weeks to complete. On 22 September, HCL wrote to CarryAway, purporting to terminate because of the delay. CarryAway has responded that it would not accept the termination, pointing to its terms and conditions.
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