Bristows' SnippITs - The bespoke bargain bites back

This post is part of the Bristows’ SnippITs series, which pulls together the key practical takeaways from recent court decisions for the tech sector and beyond.

The High Court's decision in Trinsic Collagen Limited v Procoll Limited [2026] EWHC 1793 (Ch)is a useful reminder that broadly drafted exclusion clauses remain powerful tools when drafted clearly and negotiated between commercial parties. 

Key takeaways

• An exclusion of loss of profit cuts both ways. Whether a supplier (see our earlier Bristows SnippITs) or as was the case here, a customer, parties that sleepwalk into accepting “standard” exclusions such as loss of profit without considering the likely losses they may suffer could be left without a meaningful remedy.
   
• Define “deliberate default”.  Whether the consequence is a higher liability cap, a carve-out to agreed exclusions of loss or unlimited liability, having a contractual definition will avoid misalignment on what behaviour is captured especially in light of the court’s observation about “blind-eye knowledge”.
   
• Alternative non-contractual claims. Ensure that your pleadings include any alternative non-contractual grounds available to you. Procoll failed to plead an implied term, waiver or estoppel argument in relation to the testing process, which could have enabled it to avoid exposure to damages stemming from non-compliant product, when Trinsic had chosen to take delivery of and use it before testing had completed. 
   
• Exclude implied terms, but put something in their place. Excluding implied Sale of Goods Act 1979 (SOGA) terms is more defensible under the Unfair Contract Terms Act 1977 (UCTA) where they are replaced by a bespoke, negotiated quality-and-fitness regime rather than by nothing. An exclusion that leaves the buyer with no protection at all is a much harder sell.

Background

Procoll supplied a novel water-soluble bovine collagen for use in nutraceutical drinks under a 2022 agreement to Trinsic. The agreement set detailed quality and testing requirements, included an express fitness-for-purpose obligation replacing the implied SOGA terms, and also capped liability and excluded loss of profits.

The dispute

Trinsic alleged that eight monthly batches of the collagen product supplied by Procoll were either non-compliant on testing or unusable because the collagen “reformed” (i.e. was turned into an unmixable state). Trinsic therefore withheld payment of two invoices and claimed over £7 million in lost profits. 

Procoll relied on the agreement’s exclusion of loss of profits to bar the claim. Trinsic argued that the exclusion should not apply because: (a) Procoll had acted in deliberate default which under the contract would mean the liability cap and exclusions did not apply; and (b) aspects of the contractual regime were unreasonable under UCTA.

The Court’s findings

a. Deliberate default

The agreement disapplied the liability cap and exclusions of liability arising from “deliberate default” which was undefined. Trinsic alleged its testing-related losses stemmed from a sustained, dishonest course of conduct by Procoll – including instructing the laboratory to test in a way that masked failing results and concealing them. The Court read “deliberate default” as requiring knowledge, at the time, that the act was a breach. It was not persuaded that Procoll’s conduct amounted to a calculated deception, rather than naivety and lack of understanding, so Trinsic’s deliberate default argument failed. 

It has long been the case that “deliberate default” requires a conscious wrongdoing, differing from negligence, mistake or inadvertent conduct.  Interestingly, and perhaps worryingly (?), the judge in obiter suggested that “blind-eye knowledge” was sufficient, being circumstances where a person is treated as knowing something by: (a) having a firmly grounded suspicion of truth; and (b) making a deliberate decision not to enquire because it does not want to know for certain.  

While the point was not fully argued, it potentially broadens the circumstances in which a deliberate default carve-out may be engaged, and the distinction with “wilful” default or misconduct where recklessness is more commonly captured may become more blurry.  To avoid any confusion, it remains best practice to contractually define what is meant by such terms. 

b. UCTA reasonableness

Trinsic’s second route was that clauses in the agreement which excluded implied terms, excluded loss of profits, and the liability cap were unreasonable under UCTA. Its case leaned heavily on inequality of bargaining power: at the time of entry into the agreement, Procoll was the world’s only source of this type of collagen, and Trinsic had invested heavily and could not make its drinks without it.

The Court rejected that analysis. Trinsic had real commercial leverage, both parties had legal advice, and the agreement was bespoke and heavily negotiated. The loss of profits exclusion had been specifically contested at the time the agreement was negotiated, and Trinsic had obtained other concessions in return (better pricing, a unilateral right to terminate, favourable exclusivity). The exclusion of SOGA implied terms also did not leave Trinsic without protection, as they were replaced by a negotiated quality and fitness regime. Viewed as a whole, the regime was fair and reasonable.

The sting for the supplier

Procoll did not escape entirely unscathed. Because the contractual testing process had not been followed, some product was delivered and used by Trinsic before test results were available. When later testing showed non-compliance, the Court held Procoll to the literal effect of the agreement: it owed a replacement, even though Trinsic had already used most of the relevant batch.

The judge reached that view “with[out] any great enthusiasm”, but found no coherent legal route (strangely, the pleadings did not cover implied terms, waiver or estoppel) to a more sensible commercial answer. The practical exposure was small however, with a liquidated damages regime capping the late delivery fee at £3,000. To add further insult to Trinsic’s injury Procoll was entitled to set this off against an unpaid invoice, leaving nothing payable to Trinsic. 

A cautionary tale on withholding payment – the Court found that one of the invoices Trinsic withheld payment for was validly payable, as the payment obligation under the contract had been triggered and the agreement required all sums due to be paid in full without set-off, counterclaim, deduction or withholding. Any customer seeking to withhold payment as a self-help remedy should have careful consideration of the ramifications of doing so, including: when an invoice becomes payable, whether there is any contractual procedure to dispute an invoice, and whether the contract expressly excludes the parties’ set-off rights. Failing to do this could result in a hefty interest bill.

So ultimately, while Trinsic managed to establish some contractual breaches, its multi-million pound losses were either excluded as loss of profits or set-off against unpaid invoices leaving them empty handed.