Overview

Earlier this year the High Court held IT supplier EDS liable for fraudulent misrepresentation, negligent misrepresentation and breach of contract in relation to a CRM system for Sky. Liability for fraud cannot be excluded and the successful finding of fraud against EDS has enabled Sky to recover damages significantly in excess of the contractual limit of liability of £30 million.

Sky alleged that EDS had made fraudulent misrepresentations during the sales process as to:
• available resources
• that the proposed technologies were proven and low risk
• the methodologies that EDS would use for the project
• time to go live
• the overall cost of the project.

Sky only succeeded in proving EDS had acted fraudulently regarding time to go live but that was sufficient for Sky to pursue damages in excess of the contractual limit of liability.

The judge's findings on the allegations of fraud provide useful guidance for managing risk in the sales process.

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