Commercial Law - Epcot Solutions - Essay Example

With many cases of inadequacies especially with the pertinent issue of air conditioning that was defective, Epcot raised concerns the same. However, Regus did not make any amends to ensure that the issue of the faulty air conditioning was not explored. Epcot was not pleased with the developments and declined to pay the rental fee that was placed on the accommodation they used. Upon completion of the agreed time of renting, Regus placed claims to demand the due rental fees which were met with counterclaims from Epcot.

Three issues of concern were raised by Epcot Solutions. First and foremost, Epcot claimed that Regus’ lack of professionalism to deal with the faulty air conditioners led to damages that were causes of loss of profits expected by the company. The second claim raised by Epcot was that of the opportunity to make profits being cut down by Regus. Also, there was a complaint of distress that was caused on Epcot by Regus Ltd as they had to endure the unpleasantness associated with poor air conditioning.

Regus was quick to react, and an exclusion clause that was presented by Regus claimed that Regus was not to be held responsible for any cases of losses that will be incurred while goods are in the custody of the same company. The clause further noted that losses of any kind; data, savings, profits, as well as, claims raised by third parties will not be incurred by Regus. As such, the clause mandated Epcot to ensure that goods are insured so that these losses will not be incurred by Regus. Under the UCTA Act of 1997, these claims were noted as void as Epcot argued for the exclusion clause noted by Regus to be struck out on the rationale that it did not pass the reasonableness test that is provided for in the Unfair Contract Terms (UCLA) Act.

The judge was guided by the fact that it was in Regus’ docket as per the contractual agreement to provide proper air conditioning for Epcot. With this in mind, Regus was not to deprive Epcot of the payments that were to be extended for losses that were incurred. As such, it was not reasonable for Regus to claim for Epcot’s deprival to be remedied for all the losses. Regus was thus expected to be reasonable and cater partly for failure to be in a position to ensure protection from losses and distress that Epcot incurred. The failure by Regus to provide proper air conditioning was questioned and Epcot was favored as the services as provided by the terms and conditions of the form contract were not met. An analysis of the exclusion clause used by Regus would thus exclude the same company from any malicious or fraudulent cases that will result from their inability to provide satisfactory services. This clause was considered broad as it would mean that even stern breaches of the contract will not be remedied.

The unreasonableness of the clause as provided for by the judge was challenged by the court of appeal. The court also challenged Epcot’s claim that Regus’ failure to provide proper air conditioning led to future losses that the company will incur. The appellate court noted that it would only be reasonable for Epcot to demand a remedy for a decrease in the prices of the standards they expected from Regus. Liability remedy was earlier on not provided for by the exclusion clause according to the judge. However, this was not the case in the court of appeal as provided for by the UCTA about testing the reasonableness of the exclusion clause.

The appellate court concluded that both Regus and Epcot were equal in their rights considering the vastness and competitiveness of Regus and the experience that was credited to Epcot’s employees. As such, a  balance of power was not to be used in this scenario. Insurance was emphasized by the exclusion clause that was provided by Regus and Epcot was aware of the terms and conditions of the contract. A breach of the same by Regus was not allowed as the clause in question was part of the contractual agreement.

The unreasonableness of the clause was not in order as Epcot had not raised claims on the clause but the service extended to this. As such, this does not nullify the reasonableness of the same. With the clause meeting UCLA’s provision for reasonableness, Regus was to seek the intervention of an appellate court which came through eventually. Emphasis on customers understanding the exclusion clause and insure goods are noted. As such, discussions on the responsibilities of suppliers to customers ought to be conducted so that expenses on handling losses incurred can be addressed. Read More