Electra Ltd (‘Electra’) is a large company selling cookers and other electrical equipment to commercial caterers. Paul, the Managing Director of Electra, would like your advice.

Electra Ltd (‘Electra’) is a large company selling cookers and other electrical equipment to commercial caterers. Paul, the Managing Director of Electra, would like your advice.

In February, Electra provided a quotation to Francesca for a new oven to be used in her small bakery business, Homebake Ltd (Homebake). The quotation is attached as Document A. Francesca accepted the quotation and Electra delivered the oven on 15 March. Francesca made her own arrangements for installation.

On 14 April, the oven broke down and Francesca immediately informed Electra. Upon investigation, it was found to be a manufacturing fault, and Electra eventually replaced the oven. However, Homebake was without an oven for several weeks and is claiming from Electra net loss of profit amounting to £4,000.

Paul wants to know whether Electra can refuse to pay, relying on the exemption clause in the quotation (Document A). Francesca told Paul that she did not notice the clause when she read the quotation.

Advise Electra, explaining its legal position in relation to Homebake.

Using the suggested structure for answering problem questions on exemption clauses, advise Electra as to what (if any) liability it is likely to have in relation to its contracts with Homebake. In doing so, you must fully explain the relevant law and apply the law to the facts that you have been given.

Document A

Electra Ltd

Suppliers of Equipment to the Catering Industry

VAT No: 984217300

LOWEST PRICES

Electra Ltd

Moorcroft Business Park

Oxton

GO13 1PK

Tel: 01478 564493

Fax: 01478 568103

Website: www.electra.co.uk

Date: 17/02/XX

To:      Ms Francesca Button

           Homebake Ltd

           Mead House

           Grange Road

           Lincoln

QUOTATION

Hudson 45 commercial oven

                                                                                                                             £  

2,000

VAT    400

Total  2,400

The Seller excludes all liability for loss of profits suffered as a result of any defect in goods supplied, unless the Buyer notifies the Seller of any defect within fourteen (14) days of delivery of the goods to the Buyer’s premises. This clause does not affect the Buyer’s rights in respect of death or injury caused by negligence.