What is a Loss

Believe it or not, the UK Courts, when considering losses on photocopier contracts, look to a 1915 decision involving Dunlop tyres!

In layman's terms, penalties are illegal under English law; damages are not.

It is establishing what the difference is that is problematic.
In general terms, the Court will not seek to intervene in a contract between equal parties, unless there is strong evidence that a copier dealer is overestimating his loss.

The legal phrase is "genuine pre-estimate of loss". Unless you are lucky enough to meet a judge who is prepared to consider your case on its merits (unlikely, because of the dependence of the legal system on precedent), you will struggle to prove that the clauses dealing with damages in your contract are anything other than pre-estimates of loss.

For example, a number of uk copier companies state, in their service agreements, that their loss is 40% of your average use. Taken to its logical conclusion, this means the copier company expects to make a 40% margin, which is generally not the case in the copier world, which is quite competitive.

However, you may know it is unreasonable, and they may know it is unreasonable, and even the judge may suspect it's unreasonable, but it doesn't mean the judge will decide it is.

Therefore, you need to follow some of the suggestions in the below posts to strengthen your negotiating position.

As ever, if you want the benefit of my experience please give me a call on 07872 916618.