Queensland Biodiesel Pty Ltd (鈥淨BP鈥? manufactures a range of biomass-based fuel products. It developed its own equipment for a new product and signed a $65,000 contract with Brisbane Industrial Computing Services Pty Ltd ("BICS") to supply a computer system to operate that specialised equipment. During negotiations, BICS expressly assured Queensland Biodiesel that its computer system was technically sophisticated, reliable, and could easily meet and exceed QBP's very exacting performance specifications. However, the written contract made no mention of those performance guarantees. It did, however, have an exclusion clause as follows:
BICS shall not be liable to Queensland Biodiesel for any loss or damage that occurs as a result of the failure of its computer system to operate any equipment not also supplied by BICS under this agreement.
When Queensland Biodiesel asked about the effect of this clause prior to signing the agreement, BICS said that it was a standard clause designed to exclude liability for poor performance caused by incompatible equipment supplied by its competitors 鈥?not its clients 鈥?and that it would not apply to QBP. However, the computer system failed disastrously. It failed to regulate the production process as required, causing equipment damage totally $250,000. Repairs took a month, causing a $500,000 loss in production output that QBP had contracted to sell, for marketing promotion purposes, at $400,000 鈥?an estimated one-off net loss of $100,000. As a result, buyers cancelled their purchase contracts for non-timely delivery. In addition:
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