The Exclusion Clause and the Late Delivery
Pinnacle Events Ltd hires a marquee and staging from Brightspace Hire Ltd for a three-day festival. Brightspace's standard terms, sent with the quotation and signed by Pinnacle's operations manager, state: 'Brightspace excludes all liability for loss or damage however arising, including consequential loss and loss of profit.' Brightspace's crew arrives eight hours late because of a scheduling error, and the staging is defective, forcing cancellation of the headline concert. Pinnacle loses £60,000 in ticket refunds and £25,000 in lost bar and merchandise sales. Pinnacle is a business, not a consumer. The contract price was £18,000.
1. Assess whether Brightspace can rely on the exclusion clause for the late delivery and the defective staging.
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The clause is incorporated: it was sent with the quotation, signed by Pinnacle's operations manager, and there is no suggestion the signature was procured by misrepresentation. Incorporation, however, is only the first hurdle. The clause must be construed contra proferentem against Brightspace, and it must survive the statutory controls on business-to-business terms.
As to the late delivery, the clause purports to exclude 'all liability ... however arising,' which is wide enough on its face to cover delay. But a clause will not be read as excluding liability for a fundamental breach or for a breach that deprives the innocent party of substantially the whole benefit of the contract unless the words clearly say so. An eight-hour delay on a three-day festival is serious but does not necessarily defeat the entire contract. The stronger argument for Pinnacle is that the delay caused the cancellation of the headline concert, which was the commercial purpose of the hire; if so, the clause may be read as not extending to that consequence.
As to the defective staging, the clause expressly excludes consequential loss and loss of profit. The £60,000 refunds and £25,000 lost sales are consequential losses, and the express words are likely to catch them. Pinnacle's better route is to argue that the clause is unreasonable under the statutory reasonableness test: the parties' bargaining positions, whether Pinnacle could have contracted elsewhere, whether the clause was negotiable, and whether Brightspace knew the purpose of the hire. A total exclusion of all liability for a £18,000 contract causing £85,000 of loss is a strong candidate for unreasonableness, particularly where the loss arises from Brightspace's own scheduling error.
2. If the clause fails, how would damages be calculated and what limits apply?
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Damages aim to put Pinnacle in the position it would have been in had the contract been performed. The £60,000 in ticket refunds is a direct loss flowing naturally from cancellation and is recoverable if Pinnacle can show the cancellation was caused by Brightspace's breach. The £25,000 in lost bar and merchandise sales is loss of profit; it is recoverable if it was within the reasonable contemplation of the parties at the time of contracting. Brightspace knew it was hiring equipment for a three-day festival with a headline concert, so lost ancillary sales are arguably contemplated, though Pinnacle must prove the figure with evidence rather than assertion.
The limits are causation, remoteness and mitigation. Pinnacle cannot recover losses caused by its own decision to cancel rather than delay, unless cancellation was reasonable. It must also give credit for costs saved, such as staff not paid or stock not consumed. The contract price of £18,000 is not a cap unless the contract says so; the clause as drafted excludes liability rather than limiting it, so there is no liquidated cap to apply. If the clause is severed or held unreasonable, the common-law measure applies in full, subject to the reasonableness of Pinnacle's mitigation.