Defence and Counterclaim for Defective Kitchen Units
Your client, Bright Homes Ltd, is the defendant in a claim brought by Kitchen Direct Ltd for £28,000, the price of kitchen units supplied and installed at a development of eight flats. Bright Homes says the units were delivered three weeks late, that six units were warped and had to be replaced at a cost of £12,000, and that it lost a £9,000 rental payment because the flats were not ready. Kitchen Direct's particulars rely on its standard terms, which include a clause excluding liability for consequential loss and limiting liability to the price. Bright Homes did not sign the terms; they were printed on the back of an order acknowledgement sent after the order was placed. The claim was issued on 10 November 2024. The contract was made by email on 3 March 2024. Bright Homes wants to defend and counterclaim. You are asked to settle the defence and counterclaim.
1. Identify the key issues to be pleaded in the defence and counterclaim, and draft the paragraphs dealing with incorporation of the standard terms and quality.
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Key issues. (1) Whether Kitchen Direct's standard terms were incorporated. (2) Whether the units were of satisfactory quality and fit for purpose. (3) Whether the delay was breach and what loss flowed. (4) Whether the exclusion and limitation clauses are enforceable under UCTA 1977.
Draft defence. 'Paragraph 1: The Defendant admits that it agreed to purchase and have installed kitchen units for eight flats, but denies that the contract incorporated the Claimant's standard terms. The contract was made by email on 3 March 2024. The terms were not supplied before the contract was made; they appeared only on an order acknowledgement sent after the order. They were not signed and were not reasonably brought to the Defendant's attention.'
'Paragraph 2: If, which is denied, the terms were incorporated, the Claimant may not rely on the exclusion of consequential loss or the price limitation. Those clauses are unreasonable within s.3 Unfair Contract Terms Act 1977. The Defendant will say the Claimant dealt on its written standard terms, the breach was fundamental, and the clauses were not negotiated.'
'Paragraph 3: It was an implied term that the units would be of satisfactory quality (Sale of Goods Act 1979 s.14(2)) and reasonably fit for purpose (s.14(3)), and that installation would be carried out with reasonable care and skill (Supply of Goods and Services Act 1982 s.13). In breach, six units were warped and unusable, and delivery was three weeks late. The Defendant gave notice within a reasonable time.'
Counterclaim. 'The Defendant counterclaims £12,000 for replacement units and £9,000 for lost rent, alternatively damages.'
2. What witness evidence and documents will you need, and what are the risks on the counterclaim?
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Documents. The email order, the order acknowledgement, delivery notes, invoices, photographs of the warped units, replacement invoices, the rental agreement, correspondence about delay and notice, and the pleaded standard terms.
Witnesses. The project manager who placed the order and can prove the terms were not supplied; the site manager who inspected the units; the finance director who can prove the lost rent.
Expert. A kitchen fitter or surveyor to prove the units were warped and the cost of replacement.
Risks. If the terms were incorporated, the £9,000 lost rent may be excluded as consequential loss or limited to the price. Argue that the limitation clause is unreasonable under UCTA. The £12,000 replacement cost may be challenged as betterment if the replacement units are superior; keep the specification comparable. Causation: show the late delivery caused the lost rent, not other delays. Mitigation: show the replacement was reasonable and prompt.
Limitation. The counterclaim arises from the same contract and is within six years.
Settlement. Consider a Part 36 offer; the net claim may be £28,000 minus the counterclaim.