Allocating Risk In IT Contracts

Introduction

The past fifteen years have seen a number of cases in the IT sector in which the UK Courts have had to consider the enforceability of contract limitations and exclusions under the Unfair Contract Terms Act 1977 ('UCTA'). The courts' approach in these cases (starting with the landmark decision in St. Albans District Council v ICL¹) can broadly be characterised as increasingly pro-customer and interventionist. This interventionist approach appears to have reached a high water mark with the Court's decision in Pegler v Wang (UK) Limited²; subsequent cases suggest a marked change in the courts' approach to enforcing limitations and exclusions, with the courts showing a much greater reluctance to intervene in agreements reached between experienced commercial organisations.