IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE RAMSEY)
B e f o r e :
LORD JUSTICE RICHARDS
LORD JUSTICE LEVESON
|SKANSKA RASHLEIGH WEATHERFOIL LTD||CLAIMANT/RESPONDENT|
|- v -|
|SOMERFIELD STORES LTD||DEFENDANT/APPELLANT|
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Official Shorthand Writers to the Court)
MR S DENNISON QC & MS S CHENG (instructed by Skanska UK plc Legal Department) appeared on behalf of the Respondent.
Crown Copyright ©
Facilities Management Agreement
1. We refer to the invitation to tender ("Tender") sent to you on 19th June 2000 for the provision to us of preventative and reactive maintenance services ("Services") in, respect of the major plant and related equipment. located in our stores in regions two (2) six (6) and eight (8) as detailed in the Tender.
2. We now wish to appoint you to provide us with the Services, which are more particularly described in the contract (ref.: JRB/2240842 DRAFT 3 - 14th June 2000) ("Contract") enclosed with the Tender.
3. This appointment is, however, strictly subject to contract, and to the approval of our board. As soon as this letter has been signed, we both undertake to commence good faith negotiations with a view to completing and signing a mutually acceptable contract derailing the terms of your appointment as soon as is reasonably practicable ("the Agreement"). No commitment from either of us relating to the provision of the Services shall (subject to the remaining provisions of this letter) arise until we have both signed the Agreement
4. We agree to negotiate exclusively with you in respect of the Services until we give you notice indicating otherwise, save that we may negotiate the termination of our existing arrangements with our existing suppliers relating to the provision of any services similar to the Services.
5. In consideration of the above, and whilst we am negotiating the terms of the Agreement, you will provide the Services under the terms of the Contract from 28th August 2000 (or such other date as we may advise to you) until 27th October 2000 ("the Initial Period"), such Services to be provided at the prices detailed in the Tender return provided by you (as subsequently amended) as the same are more particularly itemised on the attached schedule.
6. In agreeing to the Services being provided on the above basis during the Initial Period, neither of us is in any way fettering our discretion to seek additional or different provisions or prices when negotiating the detailed terms of the Agreement. We acknowledge that you will be expending time, resources and expense during the Initial Period, and in preparing to provide the Services after the Initial Period. Such expenses will include staff recruitment and the purchase of equipment. We, therefore, agree to reimburse your reasonable wasted costs and expenses should the Agreement not be signed or should we unilaterally withdraw from, or otherwise terminate, negotiations prior to signature of the Agreement PROVIDED ALWAYS that our liability under this paragraph shall not in any event exceed "
The August letter ended by inviting Skanska to confirm its acceptance of its terms by countersigning and returning a copy to Somerfield.
"As a result, I answer this issue in terms of the broad principle that the terms incorporated are those terms of the June FMA limited to terms necessary to define the services which Skanska was to provide but also, as I have set out above, I have identified certain [broad] terms taking account of the limited submissions made as to the practical effect of that broad principle."
Order: Appeal allowed.