Triple Point Technology, Inc v PTT Public Company Ltd

Where contractual documents are expressly incorporated into a principal agreement, they will ordinarily form part of one contractual scheme. Payment provisions in the principal agreement govern incorporated software licence orders where the documents, read together, make milestone payment the agreed regime.

A software supplier must provide the functionality specified in the contract, including integration necessary to deliver that functionality, even where the contract does not identify every technical interface. An implied duty of co-operation is context-specific and does not generally require a customer to accept compromises to specified requirements.

Force majeure suspends only obligations which the event actually prevents the party from performing, and only for the period of inability. A contractual liability cap may apply to damages for negligent contractual performance unless the relevant exception clearly captures that breach. A clause described as a penalty may nevertheless be construed as providing enforceable liquidated damages.

The claimant supplied commodities trading and risk-management software and was engaged to implement a system for the defendant. The contractual documents included a letter of intent, order forms, a software licence agreement, technical clarifications and a principal CTRM contract governed by English law.

The project fell substantially behind schedule. The claimant stopped work after demanding payment of software and maintenance invoices. The defendant later served notices requiring breaches to be remedied and terminated the contract.

The court determined whether the parties were bound by one contractual scheme, whether payment was due by fixed dates or milestones, whether either party had breached implied or express obligations, whether force majeure or an agreed suspension applied, the validity of termination, and the parties’ claims for damages and payment for services.

1. Contract and payment. The CTRM contract incorporated its exhibits, including the order forms and software licence agreement. It was the sole contract governing the relationship, including software supply and licensing. Payment was therefore governed by the milestone provisions in Article 18. The fixed dates in the order forms did not create a separate payment regime and, insofar as inconsistent, Article 18 prevailed under the order-of-precedence clause.
2. Performance and co-operation. The claimant was obliged to provide the functionality specified in the Terms of Reference. That obligation included integration between its software modules and with SAP where necessary to deliver the required unified system. The claimant’s failure to resource, plan and manage the project adequately, and its failure to address integration, amounted to breach. The implied duty of co-operation existed, but its scope depended on the particular contract and project. It did not require the defendant to accept lesser or productised functionality instead of its specified requirements.
3. Suspension and force majeure. There was no agreement suspending the contractual timetable or leaving the scope open for further negotiation. Although civil unrest could constitute force majeure, the contractual mechanism required notice identifying the obligation which the event prevented. Force majeure did not automatically suspend all obligations, and the evidence did not establish the necessary inability to perform for the claimed period.
4. Termination. The claimant’s refusal to perform from May 2014 was repudiatory and entitled the defendant to terminate. The defendant was also entitled to terminate under Articles 15.3.1 and 15.7.1. Its refusal to pay invoices by the dates stated in the order forms was not a renunciation, and its notices were not repudiatory breaches.
5. Damages and final orders. The defendant established entitlement in principle to the cost of an alternative system and specified wasted costs, but those claims were capped by Article 12.3 at US$1,038,000. Liquidated damages under Article 5 were recoverable in the sum of US$3,459,278.40. The claimant failed to establish its claim for further payment, repayment of the performance bond or an indemnity. A declaration was granted requiring the claimant to inform the defendant of rights, duties and obligations obtained or incurred in connection with the contract.