New Flow v Cut It Sports- Defence and Counterclaim- Contract on goods PDF

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Summary

This defence and counterclaim is based on a contractual dispute between supplier and manufacturer- detailing the dispute on terms of the agreement, express and implied terms, the issue with the goods, quality, amount owed, particular of breach and particulars of loss and damage....

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IN THE COUNTY COURT BETWEEN:

Claim No. GYL5820

NEW FLOW LIMITED Claimant and CUT-IT SPORTS LIMITED Defendant ______________________________ DEFENCE AND COUNTERCLAIM _____________________________ 1. Paragraph 1 of the Particulars of Claim is admitted. At all material times: a. Mr Jed Mickleson was acting on behalf of the Defendant in the course of its business of supplying high tech sports equipment, clothes and footwear for amateur and professional athletes. The Defendant company also designs and manufactures its own line of sports clothes, “Cutting Edge Performance”. b. Mr Luke Chan was acting on behalf of the Claimant in the course of its business of supplying communication technology for sports and manufacturing fabrics for high performance sports clothes. 2. Paragraph 2 of the Particulars of Claim is admitted. On 24 April 2020, Mr Chan, the Claimant’s Managing Director visited the Defendant’s offices on 24 April 2020 and discussed the functionality of the Pacer gadget and the Duo Skin fabric with Mr Mickleson, the Defendant’s Chairman and Managing Director. Mr Chan orally represented to Mr Mickleson the Pacer’s differences with Speed Distance Monitors which also used GPS in three major aspects (‘the Representations’): i)

ii) iii) iv)

It would inform the user of speed and distance automatically, by verbally calling out the data via a small speaker, so that athletes would not have to disrupt their rhythm to glance at the gadget themselves. The device does this by talking to the user through a small amplifier which is not much bigger than a pinhead; It would automatically calculate the user’s anticipated finish time after each mile, metre or kilometre, and verbally call that out as well; and It would be almost weightless, so could easily be sewn into, or attached to, sports clothes and would not hinder performance; The tests had proved the Pacer was accurate and reliable in recording and transmitting data.

3. These representations were part of the express and implied terms of the contract.

3. Relying on and induced by this representation, Mr Mickleson entered into an oral agreement (‘the Agreement’) made in a telephone conversation with Mr Chan on 3 June 2020. It was agreed that the Claimant would supply the Defendant 100 fully assembled Pacers, comprising of 100 Pacers for a price of £30,000 (being £300 per Pacer). The Agreement is evidenced by an email sent by Mr Mickleson to Mr Chan on 3 June 2020, copy of which is attached. 4. The following were the express terms of the Agreement: a. 100 fully assembled Pacers were to be delivered by 29 June 2020; b. The total price of the Pacers, £30,000 was to be paid within 28 days of delivery. 5. The following were therefore express, alternatively implied, terms of the Agreement: refer back to paragraph 2 a. the Pacer would be able to inform the user of speed and distance automatically through a small speaker; b. the Pacer would also automatically calculate the user’s anticipated finish time after each mile, metre or kilometre and inform the user through the small speaker; c. the Pacer would be weightless for easy attachment to sports clothes and for high performance. 6. There were implied terms of the Agreement that the Pacers would be: a. of satisfactory quality; and b. fit for their purpose, namely for three major aspects set out in paragraph 2 above. 7. At the time of the Agreement, the Claimant knew, Mr Chan having been informed by Mr Mickleson in conversations on 3 June 2020, that the Defendant intended to resell the Pacers to their regular customers at a price of £375 per Pacer. good paragraph on knowledge 8. Paragraph 3 of the Particulars of Claim is admitted. In purported performance of the Agreement by the Claimant, the Pacers were delivered to the Claimant’s premises on 26 June 2020. 9. After sending samples to ten running clubs, it came to the Defendant’s attention that the Pacers were not functioning as the Claimant described when the customers and clubs returned them within a few weeks. Therefore, the Claimant’s Representations were false. 10. As soon as the Defendant discovered that the problems with the Pacers, Mr Mickleson informed Mr Chan, by telephone, of the defects and rejected the Pacers on 17 July 2020. The Defendant requested for the Claimant to retrieve the goods from their premises and rescinded the contract.

11. The Claimant had made false representation and acted in repudiatory breach of the express and/or implied terms set out in the Agreement as set out in paragraph 5. PARTICULARS OF BREACH The Pacers supplied by the Claimant were not of satisfactory quality and/or fit for purpose in that: (1) the Pacer was not lightweight (2) the heavy Pacer hindered the performance (3) the Pacer was difficult to sew into or attach to sports clothes (4) the GPS signal receptor within the Pacer performed poorly (5) the GPS was weak in built up areas (6) the Pacer was not capable of recording data reliably (7) the Pacer could not transmit data reliably or accurately. 12. Paragraph 4 of the Particulars of Claim is admitted. On 21 December 2020, Mr Chan emailed Mr Mickleson demanding payment of the sum of £30,000 which was due under the invoice 2202 dated 26 June 2020. Mr Mickleson responded with a confirmation of the rejection of the goods made months ago and affirmed non-payment of the defective Pacers by email dated 29 December 2020. 13. As to paragraph 5 of the Particulars of Claim, it is denied that the Defendants are in breach of the alleged or any terms of the Agreement. As a result of the above breaches by the Claimant, the Defendant was entitled to and did treat itself as discharged from its further obligations under the Agreement. 14. Further, if contrary to this Defence, the Defendants are held liable to the Claimants, the Defendants will seek to reduce the Claimants' claim by setting off the sum counterclaimed below. COUNTERCLAIM 15. The Defendant repeats paragraphs 1 and 3 to 11 of its Defence. 16. As a result of the Claimant’s repudiatory breaches, the Defendant has suffered loss and damage. PARTICULARS OF LOSS AND DAMAGE

a. loss of value of the Agreement i.

loss of profit, namely £75 per Pacer x100, being £7,500

£7,500 £7,500

PARTICULARS OF LOSS

Resale price of Pacers at £375 per Pacer x 100 Less credit for the unpaid price

£37,500 £30,000 £ 7,500 17. Further, the Defendants claims interest pursuant to section 69 of the County Courts Act 1984 on the sum of £7,500 from 26 June 2020 at the rate of 8% per annum, amounting to [£xx] at [ ] 2021 and continuing at the daily rate of [£xx] until judgment or sooner payment. AND the Defendant counterclaims: (1) Damages in the sum of £7,500; and (2) interest on that sum pursuant to section 69 of the County Courts Act 1984 at the rate of 8% per annum, amounting to [£xx] at [ ]2021 and continuing at the daily rate of [£xx]. Alternatively: (3) Rescission of the contract; and (4) Damages for fraudulent misrepresentation; and (5) Interest to be assessed pursuant to section 69 of the County Courts Act 1984. MONICA GREEN STATEMENT OF TRUTH etc Dated etc....