HT-2023-000321 - [2025] EWHC 1764 (TCC)

Fecha: 11-Jul-2025

D. The Contract

59.

As set out above, there is no dispute that the 10 May Purchase Order and the Revised Purchase Order were both subject to KML’s terms and conditions.

60.

For the purposes of the terms and conditions, KML was the ‘Buyer’ and Pharos the ‘Seller’. They included the following:

DEFINITIONS

In these Conditions, unless the context otherwise requires, the following words have the following meanings:

“Contract” the contract for the purchase of Goods or Services constituted by the Seller’s acceptance of the Purchase Order in accordance with these Conditions;

GENERAL

2.1

These Conditions, and any agreed formally authorised amendments thereto, shall govern the Contract to the exclusion of any terms and conditions which the Seller may seek to impose.

2.2

The Purchase Order constitutes an offer by the Buyer to purchase the Goods subject to these Conditions and supersedes all prior discussions and negotiations.

VARIATION

3.1

No variation of these Conditions or of the Contract shall be effective unless agreed in writing between an authorised representative of the Seller and an authorised representative of the Buyer.

3.2

The Buyer shall be entitled to vary a Purchase Order and any specification that may relate to such Purchase Order, at any time prior to delivery. In this event, the Seller reserves the right to re-negotiate the terms of the Purchase Order including the price and delivery timescale.

QUALITY AND DESCRIPTION

4.1

The Seller warrants to the Buyer that the Goods or Services shall:

be of satisfactory quality and free from defects in design, material or workmanship and be fit for their intended purpose;

be of sound material and workmanship;

PAYMENT

The Buyer shall pay for Goods and Services within 60 days of delivery provided that they are in accordance with any applicable Specification and the terms of the Contract. Without prejudice to any other right or remedy, the Buyer reserves the right to set off any sum of money owing at any time by the Seller to the Buyer against any sum payable by the Buyer to the Seller under the Contract or under any other current contract between the Buyer and the Seller.

DELIVERY, DELAY, LIQUIDATED DAMAGES AND OTHER CONSEQUENCES

8.2

The Seller shall deliver the Goods or Services by the date specified in the Purchase Order. …

8.3

Should the Seller fail to deliver the Goods or Services by the specified date for any reason other than Force Majeure, the Buyer (without prejudice to any other right or remedy which it may have) shall be entitled to, whether as a deduction from any sums due to the Seller or otherwise, 10% of the total Contract Price due to the Seller in respect of those delayed Goods or Services for each week (or part thereof) in which the Seller fails to deliver them.

8.4

charge to the Seller any additional costs, losses or expenses which the Buyer may reasonably incur due to the Seller’s failure to deliver the Goods or Services by the specified date.

RISK AND DAMAGE/LOSS IN TRANSIT

9.1

The Goods or Services shall remain at the Seller’s risk until delivered and accepted by the Buyer.

10.

TIME

Time for performance and all other dates specified in the Purchase Order shall be of the essence. The supply of Goods and Services by the Seller to the Buyer may be time or project critical, and thereby a critical path item. The supply of Goods or Services by the Seller to the Buyer may be crucial for the timely and efficient operation of ships and vessels or marine facilities. The Seller must not delay or impede the operation of the Buyer’s ships and vessels or marine facilities.

12.

REJECTION

12.1

If any of the Goods or Services do not comply with the Contract or the Seller does not comply with its obligations under clause 4, the Buyer shall be entitled to reject those Goods or Services or any part of them by notice in writing to the Seller given within 14 days or such other period as may be agreed …

13.

INDEMNITY

13.1

The Seller shall indemnify the Buyer against all liability, claims, costs and expenses (including reasonable legal expenses), loss, personal injury or damage to property which the Buyer may suffer or incur as a result of or in connection with:

any act or omission (including negligence) of the Seller, its sub-sellers, employees or agents in supplying, delivering and installing the Goods or Services in accordance with the Contract and the Conditions.

a breach of any warranty given by the Seller in relation to the Goods or Services including, but not limited to, the warranties contained in clauses 4 and 15;

14.

ASSIGNMENT AND SUB-CONTRACTING

14.2

The Seller shall not sub-contract the Contract or any part of it other than for materials, minor details or for any part of the Goods or Services of which the makers are named in the Purchase Order or Specification, without the consent in writing of the Buyer. Any such consent shall not relieve the Seller of any of its obligations under the Contract.

15.

SERVICES

15.1

Where the Seller is providing any services, the “Goods or Services” as used in these Conditions shall be interpreted to include the provision of such services. In providing those services, the Seller warrants that it shall use only qualified and experienced personnel acting with all care and diligence and it accepts full responsibility for such personnel, their property, their acts and omissions.

18.

SELLER TO INFORM ITSELF

The Seller shall be deemed to have satisfied itself as to the extent and nature of the Goods and Services; in the case of Services including but not limited to the services, personnel, materials and equipment, plant, consumables and facilities required … general/ local conditions, access, climatic, sea, water and weather conditions, and all other matters which could affect progress or performance of the Seller’s obligations.

61.

It was alleged by KML, and admitted by Pharos, that the Contract was subject to an implied term, pursuant to section 13 of the Supply of Goods and Services Act 1982, that the works required of Pharos would be carried out with reasonable care and skill and, (if contrary to KML’s primary case, there was no fixed duration) within a reasonable time. Pharos denies that it was an implied term that mobilisation would be carried out within a reasonable time, although it accepts an obligation to do what it reasonably could to get its equipment to the embedment works site.

62.

There are a number of issues between the parties as to the correct construction of the Contract.