| p>In the recent case, Peregrine Systems Limited v | | | | Once Peregrine had provided £200,000 worth |
| Steria Limited [2005] , a customer wrongly terminated | | | | of services, there was no obligation to do anything |
| an IT contract with its software supplier and as a | | | | more to complete the project within a reasonable time; |
| result had to pay the supplier £700,000 plus | | | | A supplier having to perform "within a reasonable time" |
| interests - the outstanding balance due to the supplier | | | | does not necessarily mean that the customer can end |
| under the contract. | | | | the contract if this is not done; |
| The defendant, Steria, terminated the agreement with | | | | Steria had not properly communicated its |
| Peregrine Systems alleging that it was entitled to | | | | dissatisfaction to Peregrine; and |
| terminate the contract between the parties as a result | | | | Steria continued to use the software and so acted in |
| of delays and commercial misstatements. Steria also | | | | a manner implying Steria's wish to affirm the contract. |
| claimed damages from Peregrine. | | | | Comment: This case highlights the importance of |
| In return, Peregrine brought proceedings against Steria | | | | contractual parties clearly setting out their rights and |
| for money owed under the contract. Initially, the Court | | | | responsibilities when entering into an IT contract. |
| held that Peregrine had not committed any breach of | | | | Furthermore, parties should act properly when |
| contract and that there had been no misstatements. | | | | dissatisfied with goods or services and analyse |
| The Court also held that Steria had in any event lost | | | | contractual documentation carefully before deciding to |
| the right to terminate the contract because Steria had, | | | | terminate an IT contract. |
| by its conduct, affirmed the contract by continuing to | | | | If you require further information contact us at © |
| use the software. Steria appealed these decisions. | | | | RT COOPERS, 2005. This Briefing Note does not |
| The Court of Appeal decided against Steria on both | | | | provide a comprehensive or complete statement of |
| as follows: | | | | the law relating to the issues discussed nor does it |
| Due to the wording of the contract Peregrine was only | | | | constitute legal advice. It is intended only to highlight |
| obliged to provide £200,000 worth of services | | | | general issues. |
| and was not required to fully implement the software. | | | | |