IT - Negotiating certain Terms in IT Contracts
Posted by Nick Niesen on October 27th, 2010
n Vogon International Limited v The Serious Fraud Office , a dispute arose in relation to the interpretation of the payment terms in the contract between the parties.
The Serious Fraud Office (?SFO?) hired Vogan International Limited (?Vogon?) to retrieve email data from computerised tapes used during a criminal investigation. Prior to entering into the agreement, Vogon calculated its estimated fee based upon number of completed backups. When Vogon later submitted its quotation to the SFO, the costs were determined in relation to number of completed Microsoft Exchange databases.
Vogon processed 39 backups from the tapes provided by the SFO in relation to two Microsoft Exchange Databases. Vogon sent an invoice to the SFO for £314,375 for the 10 days' work needed to process the 39 backups.
The SFO claimed that the sum due was based upon the number of completed Microsoft Exchange databases, so paid Vogon £22,500.
The court ruled in the SFO's favour as follows:-
the word ?database? had no single meaning and so it was necessary to consider the word in its contextual meaning;
the court was correct in its interpretation of the contract and awarding the SFO its costs;
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© RT COOPERS, 2005. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.
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