Triple Point Technology Inc v PTT Public Co Ltd
Liquidated damages for delay accrue up to termination even if the work is never completed by the original contractor.
Facts
In 2012 PTT, a Thai energy company, engaged Triple Point to design and install a new software system for its commodities trading business, to be delivered in two phases with milestones for each stage. The contract provided for liquidated damages at a rate of 0.1 per cent of the price for each day of delay in delivering the work, and contained a cap on Triple Point's liability, which did not apply to liability arising from fraud, gross negligence, wilful misconduct or negligence. Triple Point completed the first stage late and then stopped work. PTT terminated the contract and claimed liquidated damages for the delay up to termination and general damages for the cost of procuring a replacement system. The Court of Appeal held that liquidated damages were not payable for work that was never completed and accepted.
Legal principle
The Supreme Court held that PTT was entitled to liquidated damages for the period of delay up to termination, and general damages thereafter. Lady Arden said that the Court of Appeal's interpretation was inconsistent with the commercial purpose of liquidated damages clauses, which is to provide certainty about the employer's remedy for delay, and that the usual understanding is that such damages accrue until termination, after which general damages are payable for any further loss. The court also held that the exception to the cap for negligence covered negligent breaches of contractual duties of care, not only the tort of negligence, so Triple Point's liability for negligent breach was not capped.
Related cases on remedies
- Addis v Gramophone Co Ltd [1909] AC 488
- Anglia Television Ltd v Reed [1972] 1 QB 60
- Attorney General v Blake [2001] 1 AC 268
- British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673
- Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, [2016] AC 1172
- Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
- Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79
- Farley v Skinner [2001] UKHL 49, [2002] 2 AC 732
Studying contract law? Our tutors help you understand and apply cases like this in essays, problem questions and exams. Request a quote or browse our law notes.
This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
