The High Court held, in The Software Incubator v Computer Associates [2016] EWHC 1587 (QB), that a supply of commoditised software is a sale of goods for the purposes of the Commercial Agents (Council Directive) Regulations 1993 (“Regulations”).

Background

Computer Associates UK Ltd (“CA”) entered into a non-exclusive agreement with The Software Incubator Limited (“TSI”). TSI agreed to provide software consulting and promotion services in return for a fixed monthly fee and commission on sales.

TSI’s director was unhappy with the relationship and decided to become an agent for another company (“the company”), which led to TSI signing an agreement with them. TSI intended to terminate the agreement with CA, but CA served three months’ notice of termination on TSI in September 2013. However, CA then decided to terminate the agreement earlier and with immediate effect, alleging that TSI’s work for the company amounted to a repudiatory breach.  TSI claimed compensation under the Regulations, commission on post-termination sales, and damages.

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