The High Court has considered if a limitation of liability clause applied to a purchaser's obligation to pay for goods purchased. 

The case arose in the context of trading arrangements between Costcutter and the owners of convenience stores.  The limitation clause in the agreements capped:

 "the total liability of either party … in respect of all acts, omissions, events and occurrences whether arising out of any tortious act, breach of contract or statutory duty or otherwise". 

Costcutter sourced the goods from a third party - in later years the third party supplier changed, as did the business model. The buyers were unhappy with the service offered by Costcutter after the changes and wanted to switch to Spar, so cancelled their direct debits paying for goods. Costcutter brought proceedings for payment for the goods; the buyers counterclaimed for poor service.  The buyers sought to rely on the limitation of liability clause. 

The first instance judge had decided in favour of the buyer, but the High Court overruled the earlier decision, holding that the wording of the limitation clause did not affect the buyer's primary obligation to pay for goods received. The clause was drafted to limit secondary obligations to pay damages following a breach.

The High Court said that an action for the price of goods is a claim in debt to enforce a primary obligation. It was not a claim for breach of contract. Although the contract limited damages for breach of contract, this did not prevent an action in debt regarding the primary obligation to pay. The wording in the clause that said "or otherwise" was not sufficiently clear to exclude a claim linked to the enforcement of primary obligations. 

In addition, the judge said that broad exclusion clauses which are aimed at any cause of action are not the same as an agreement to excuse performance of a primary obligation - a party is unlikely to have agreed to give up a valuable right that it would otherwise have had without clear words. 

The judge said that the wording in the clause was not directed at removing the primary obligation to comply with its obligation to pay for goods received. It was directed expressly to acts or omissions arising out of any tortious act, breach of contract or statutory duty. The phrase “breach of contract”' was clear in context. 

The claim to enforce the primary obligation of payment was not a claim for breach of contract. The fact that damages for breach of contract were expressly limited did not prevent the action in debt in respect of the primary obligation. The words “or otherwise” were not sufficiently clear to have the effect of excluding any claim relating to the enforcement of primary obligations, even if the purported exclusion of the liability to perform the primary obligation could ever exist meaningfully in an effective contract. Although the wording in this clause did not affect the buyer's payment obligations, this was a matter of construction.

The case illustrates that if a clause could affect a customer's obligation to pay, the supplier may want to state in the contract that this is not the parties' intention.  It is a good illustration of the distinction between the primary obligation on the defendants in this case to comply with the obligation to pay for goods received, and a claim for breach of contract