A company was prevented from bringing claims worth around £3.5 million because of failure to specify the exact warranties in respect of which it was claiming . A recent decision handed down by the UK Courts highlights the importance of complying with the strict terms of contract provisions (Teoco UK Limited v Aircom Jersey 4 Limited unreported).
The Court held that the claimant was too "tentative and contingent" in the description of its claims. Letters before action were drafted and referred to claims that "may exist" and "potential claims" with an "initial estimate of their possible quantum".
In handing down its judgment striking out the claims, the Court stated that "proper compliance with contractual notice requirements is not a technical or trivial matter."
On the facts, Teoco had failed in both letters before action to identify the particular warranties that had been breached except in the most general terms. This was fatal to its claim. While a rather draconian judgment, it highlights the necessity to adhere to all procedural requirements before initiating your breach of warranty claims. Don't get caught out by the small print.