Commercial Management (Investments) Ltd v (1) Mitchell Design and Construct Ltd and (2) Regorco Ltd [2016] EWHC 76 (TCC)

The TCC considered as a preliminary issue whether a limitation clause had been incorporated into a sub-contract entered into between the first defendant design and build contractor and its piling sub-contractor (the second defendant). The sub-contractor’s terms and conditions contained a limitation clause requiring all claims to be notified within 28 days of the appearance of the defect. The contractor’s purchase order was sent to the sub-contractor after the works were complete and included a clause stating that the sub-contractor’s terms would be overridden, and that the sub-contractor would be required to provide an indemnity for liabilities arising out of performance of the sub-contract. The sub-contractor returned the order amending the clause so that the contractor’s terms would only override where “applicable.” Defects arose 9 years later and the sub-contractor sought to rely on the 28 day limitation clause. The Court held that the clause had not been incorporated into the contract as the indemnity clause was “applicable” to the same subject matter as the limitation clause and therefore overrode it. Obiter, the Judge held that the limitation clause did not satisfy the test of reasonableness under the Unfair Contract Terms Act 1977.