c o l u m b i a . endstream 190 0 obj They spell out the division of risk between the parties, and expressly exclude some types of loss (or cover other types through express warranties and indemnities). 0000006931 00000 n 3 0 obj Information that the rece… 0000002538 00000 n 201 0 obj Or they could be direct damages and recoverable. 2. 0000002076 00000 n The point remains, however, that someone thought that they really needed to put the phrase “consequential or special” in the damages exclusion clause for the benefit of the Builder and the inclusion of that phrase actually resulted In some cases, a capon damages may be used. If the clause had been reworded to either delete these words or place them at the end of the clause, it would [For a follow-up to this post, see this March 2, 2010 blog post.] Consequential loss (also known as indirect loss) arises from a special circumstance of the case, not in the usual course of things. Consequential loss exclusion clauses are very common in commercial contracts, especially in those relating to construction and energy projects. 192 0 obj White & Case Technology Newsflash On December 15, 2014, the United States District Court for the Southern District of New York ruled in PNC Bank v.Wolters Kluwer Financial Services that defendant Wolters Kluwer Financial Services ("WKFS") was not liable for certain breach of contract damages relating to a malfunction in software WKFS had licensed to PNC Bank ("PNC"). 0000003882 00000 n endobj Consequential damages are damages that proximately result from a breach of a contract. He decided that it was best to construe the clause as if it read “for loss of production, profits, business, indirect losses or consequential damages of any other kind”. endobj 4 0 obj 193 0 obj 0000002284 00000 n The failure resulted in a breach of contract. <>stream ;DZ��,O��s��i�6�� ��]�s=����?�������%~kh��p�%�a� N6w�Hcz�j��s���gP�j�ț?T!x�� 2 0 obj <> endobj Information that is received from a third party that allows the information to be disclosed. Exclusion of Consequential Damages IN NO EVENT WILL VENDOR BE LIABLE FOR LOST PROFITS OR LOSS OF BUSINESS OR FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT. ACME was aware of the clause that called for $1,000 per To take an example, all loss of profit would therefore be excluded <> The defendant relied upon the exclusion clause, arguing that the exclusion clause had defined "indirect or consequential" losses as including "the liabilities of the Customer to … EXCLUSION OF INDIRECT DAMAGES. Thus, as we have seen through this sample of cases, while the Texas courts generally respect the parties’ contractual language classifying certain damages as direct or consequential, the courts will closely examine the circumstances giving rise to the claim. 0000000016 00000 n startxref 0000001480 00000 n endobj xref 0000016803 00000 n It is well established that an exclusion of indirect and consequential loss does not exclude any loss which arises as a direct and natural consequence of the breach of contract. In no event either party shall be liable for any special, incidental, indirect or consequential damages arising out of a breach of this Agreement, including but not limited to damages for profit loss. 0000018486 00000 n This dilemma is illustrated by the example of the following exclusion clause: "Neither party shall be liable to the other für any indirect or consequentiallosses whatsoever." 186 0 obj c o l u m b i a . ( Except as otherwise agreed herein, the Seller shall not be liable for special, or consequential damages, such as, but not limited to, damage or loss of. It is recoverable only if the paying party knew or should have known of that circumstance when it made the contract, under the second limb of the rule in Hadley v Baxendale [1854] EWHC Exch J70 . You should also be sure to name standard exclusions on what does not constitute confidential information. These exclusions include: 1. So, for example, in one reported case, a limitation clause purported to exclude liability for “loss of anticipated profits … or for indirect or consequential damage”. 194 0 obj endobj <> <>>> The Agreement contained the following clause excluding indirect and consequential loss: "Neither party shall be liable… for any indirect or consequential loss or … Good exclusion clauses do not leave it to the case law to decide what will be direct or indirect loss. endobj endobj 0000003212 00000 n 0000016987 00000 n x��\ms�8�����V���e1|'q��V����2�l�����>Ȗ��o���f����C7��HPڹ�۩�E� �O�����OɫW/<>;I������89�x����rA�#�*RM@Ѥ�BvLQĦhT�֝���?��rr�����t�N>L����}{3�Փ�������c����(����I/^�H�l:k&称�_��S}��\���b�zZ��w�,�� :?�,V����bI���7ŀ���Ks�|�eG�a8xH�UզY;�,=[�i��Ϟ `c�l��it0ʧ�Ң�C��1�>1/�5�������~L��S�+�4.���ޒj��`�O(���g��c:�&N>O��"9�U�_��ӏv����rj����3����CĽ��S���Vi���sr�#�~I4S�U��1R~��㇟N�;U�*��/N`���ؐ�I�U��3(e�|���q��M���$�r��b��/��%|��3�^?�G�����凇{��r�&�h� ������W8|_�sr�������Q_>�8�>��4H��F8.��a.\ g��q~\'���71�]Z��1�h�4��g�>�k���� �. Consequential damages are also commonly referred to as “indirect damages” because they arise indirectly from a breach due to various ����tW�F@i�R@�e�Zl�l�ۚ8��a�����#��M�jr�����ŘV�K�li4D���Z�h��ړ����,�5�^�3?�Q�m�|���o��v7�&w�B�&nݐ�ʩF(�>r�T)O��~���B��r?TT�J5�g�S�Tb�Ah. <>/Border[0 0 0]/Contents(cls2184@columbia.edu)/Rect[206.4902 72.3516 300.5024 82.8984]/StructParent 8/Subtype/Link/Type/Annot>> Consequential loss exclusion clause fails to shut out damages in IT system dispute Print Twitter LinkedIn The High Court decision in GB Gas v Accenture illustrates once again that under English law an exclusion of liability for indirect or consequential loss often has little practical effect. 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