The Gown Delivery: Which Clause Governs the Deduction
Meridian Supplies Ltd contracted with St Aiden's Trust to deliver 1,200 sterile gowns by 14 March. Clause 7.2 reads: 'Delivery is complete only when the Goods are unloaded at the Buyer's nominated site and a delivery note is signed by an authorised representative of the Buyer.' Clause 7.4: 'Liquidated damages of £450 per day accrue for each day by which delivery exceeds the Contracted Delivery Date.' Clause 9.1: 'Neither party is liable for delay caused by the other party's failure to provide site access.' The contract specifies no time of day for delivery. The lorry arrived at 17:40 on 14 March; the Trust's goods-in bay closes at 17:00 and the driver was turned away. Unloading began at 09:10 on 15 March and the delivery note was signed at 09:25. The Trust intends to deduct £450. Meridian's account manager argues the goods 'reached site on time' and that the bay closure was the Trust's own doing. Both sides are quoting the same four sentences.
1. On the words of the contract, when was delivery complete and how many days late was it? Does clause 9.1 change the answer?
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Step 1 - apply clause 7.2 as written. The definition is cumulative: goods unloaded and a signed delivery note. Unloading finished at 09:10 on 15 March, the note was signed at 09:25. The later event governs, so delivery was complete at 09:25 on 15 March.
Step 2 - apply 7.4. The Contracted Delivery Date is 14 March and the clause measures excess in whole days. One day's excess → £450 prima facie. The contract names no time of day, so a 17:40 arrival on 14 March was performance on the day, not lateness.
Step 3 - test 9.1. Ask counterfactually: but for the Trust's conduct, when would delivery have been complete? The lorry was on site at 17:40 on 14 March with the goods available for unloading. Unloading plus signature takes well under an hour. Had the bay been open or staffed, completion would have fallen on 14 March. The entire excess day is therefore caused by the Buyer's site-access arrangement, and 9.1 disapplies liability for it.
Conclusion: 7.2 puts completion on 15 March and 7.4 produces one day's LD, but 9.1 excuses that day. The Trust's £450 deduction is not supportable on these facts; at most a de minimis argument exists for the 15 minutes between 09:10 and 09:25, which no tribunal would trouble with.
Note what makes this arguable rather than obvious: the contract has a definitional gap (no delivery window, no site-hours obligation). Both parties are reading the same four sentences correctly in isolation - the dispute lives in the gap between 7.2 and 9.1.
2. The account manager says the goods 'reached site on time'. Is that argument correct? Explain what is right and what is wrong with it.
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Right on the facts, wrong as an argument - and dangerously so.
- Right on the facts: the lorry was at the nominated site at 17:40 on 14 March, within the contracted day. Meridian did everything within its own control.
- Wrong as an argument: clause 7.2 does not define delivery as arrival. It defines it as unloading plus a signed note. 'Reached site' is not the trigger for 7.4, so the argument fails on the contract's own terms and invites the Trust to answer that Meridian chose a 17:40 arrival without checking the bay's published hours.
The important point: the manager's conclusion (no damages) is correct, but the reasoning is not. The conclusion survives only because clause 9.1 attributes the delay to the Trust's failure to provide access. If the facts shifted slightly - bay open, staff present, note refused for an administrative reason - 7.2 would still place completion on 15 March and the lay argument would collapse.
In an exam answer, separate the outcome from the route to it. An argument that reaches the right answer through a clause that does not say what it is claimed to say is a liability in negotiation, because the other side can dismantle it without conceding the point.
3. Propose the minimum amendment that would prevent this dispute recurring. Do not change the liquidated damages rate.
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Fix the definitional gap in three short additions; leave 7.4's rate untouched.
- Add a delivery window to the delivery obligation: 'Delivery shall take place between 08:00 and 16:30 on a Business Day, or at such other time as the Buyer confirms in writing at least two Business Days in advance.'
- Add a matching buyer obligation: 'The Buyer shall provide clear access to the nominated site's goods-in facility throughout that window and shall keep it staffed.'
- Add a deemed-delivery rule to close the loop: 'If the Buyer fails to provide access during the delivery window, delivery shall be deemed complete at the end of that window and the Buyer shall bear all redelivery and storage costs.'
Why this and not a renegotiated LD rate: the £450 figure was never the problem. The problem is that 7.2 defines completion by an event the buyer controls (signature) while 7.4 charges the supplier for delay, and 9.1 patches the resulting unfairness only after an argument. Amendments 1–3 make the liability follow conduct without needing 9.1 at all.
What to watch: the deemed-delivery rule must be drafted so it does not let a supplier deliver outside the window and claim deemed completion - hence the window comes first, and the deeming applies only to a failure by the buyer within it.