exclusion of indirect and consequential damages


exclusion of indirect and consequential damages

at Keating Chambers. Details concerning the tools in use are in our privacy policy. So unless the UK changes its mind,... CMS is delighted to present its quarterly Health & Safety newsletter, providing information on recent issues relevant to health and safety in the workplace, including a selection of industry news and recent health and safety prosecutions. Tap the Share button at the bottom of the Safari screen for the website you're on, Tap the icon labelled 'Add to Home Screen', Tap the 'Add' button in the upper right corner. Law-Now Zones provide expert analysis on specialist topics. The Court held that the express wording of the limitation clause in Dow excluded only “loss of profits and damages arising in the context of indirect or consequential damages” (emphasis added). For advice on construction contracts and other construction matters, he may be contacted at chee.yean.choy@sg.rajahtann.com. Care should be taken when drafting to ensure that a clause excludes what it is supposed to. Our Cookie Notice is part of our Privacy Policy and explains in detail how and why we use cookies. The case follows recent judicial commentary criticising the traditional approach and may suggest a more case-by-case approach to the interpretation of such exclusions (whether or not the same outcome is reached). Consequential loss exclusion clauses are very common in commercial contracts, especially in those relating to construction and energy projects. These cookies “remember” that you have visited a website and this information may be shared with the providers of analytics services (see details in our privacy policy). However, in evaluating the natural and ordinary meaning of the clause, the judge reached the same conclusion as the traditional approach: “The exclusion is "for any indirect or consequential loss or damage". British Sugar PLC v NEI Power Products Ltd [1997] CLC 622, Caledonia North Sea Limited v British Telecommunications plc [2002] BLR 139, Scottish Power UK Plc v BP Exploration Operating Company Ltd [2015] EWHC 2658 (Comm), Transocean Drilling UK Ltd v Providence Resources Plc [2016] EWCA Civ 372, Star Polaris LLC v HHIC-Phil Inc [2016] EWHC 2941 (Comm), Exclusions for indirect and consequential loss: English law on the brink of change? Indirect and Consequential Loss. In 2016, the Court of Appeal thought it was “questionable” whether the cases underpinning the traditional approach would be decided in the same way today (Transocean Drilling UK Ltd v Providence Resources Plc). Exclusion of liability for “indirect or consequential” losses. To take full advantage of our website, we recommend that you click on “Accept All”. In no event shall any Party or any affiliate thereof or any of their respective directors, officers, agents, or employees be liable to any other Party or any affiliate thereof or any of their respective directors, officers, agents, or employees for any indirect, consequential, punitive, special, incidental or exemplary losses or damages (including without limitation lost profits or … Exclusion and limitation clauses should be drafted to comply with the legislation regarding fairness where the legislation applies  (Please. Any other damages which may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract. Several initiatives, including accelerator programmes, incubators and a multitude of free zones geared towards promoting... “For too long, modern and innovative approaches to public procurement have been bogged down in bureaucratic, process-driven procedures. While a plaintiff wants an award, a defendant does not because the indirect results of having breached a contract can have a far-reaching impact on the defendant. The arbitra… the exclusion of liability for indirect or consequential losses, and the exclusion or limitation clause worded accordingly. The result of consequential damages can include: 1. However, the rule is very well established and in British Sugar plc v NEI Power Projects, the Court of Appeal commented that reasonable businessmen using such language must be taken to be aware of the distinction. Session cookies only last for the duration of your visit and are deleted from your device when you close your internet browser. Indirect and consequential loss exclusions: English law holds the line for now. These are “direct losses”. Technical cookies are required for the site to function properly, to be legally compliant and secure. These cookies “remember” that you have visited a website and this information may be shared with the providers of analytics services (see details in our privacy policy). It is unfortunate that the court’s reasoning in this regard is not spelt out in more detail. Click on the 'menu' button again and select "Bookmarks". In Star Polaris the Commercial Court considered the meaning of the phrase "consequential or special losses, damages or expenses" as it appeared in an exclusion clause in a contract for the construction of a vessel (the Contract). Several decisions of the English Court of Appeal have established that contractual exclusions for “consequential and indirect losses” will be limited to losses which fall within what is known as the “second limb” of Hadley v Baxendale. Damages that may fairly and reasonably be considered as arising naturally, i.e. Therefore, the claims in this case do not appear to fall within the scope of the exclusion.”. Analytics cookies collect anonymised information such as the number of site visitors or most popular pages. Following delivery, the ship suffered a serious engine failure and was towed to Korea for repairs. Lost profit, lost rents, and lost business opportunities are examples of consequential damages that could be incurred as a result of a direct physical loss to property. Personalisation cookies collect information about your website browsing habits and offer you a personalised user experience based on past visits, your location or browser settings. Keeping these cookies enabled helps us improve our website and provide you with the most relevant content. These are “indirect losses”or “consequential losses” (the terms “indirect” and “consequential” loss are used interchangeably). If you want to individually select which cookies we can set, please click "Select preferences" below. Later that year, the traditional approach was departed from in Star Polaris LLC v HHIC-Phil Inc, albeit by reference to specific wording of the clause in question which suggested a different interpretation (for our Law-Now on that case, please click here). One of the most common types of clause is one that attempts to limit liability for “indirect or consequential” loss or damage. Excluding “consequential losses” has always been, and remains, dangerous. This judgment is likely to add to the growing debate over the proper interpretation of indirect and consequential loss exclusions under English law. The Government has today announced that the deadline for building owners to complete their applications to the Building Safety Fund has been extended to 30 June 2021 (from 31 December). The first issue was the meaning of the words "indirect and consequential loss". Click on the 'start' button and save as a bookmark. Exclusion of liability for “indirect or consequential” losses. You can change these settings at any time via the button "Update Cookie Preferences" in our Cookie Notice. They usually take a similar form to the following, which is from clause 17.6 of the FIDIC Red Book: “Neither Party shall be liable to the other Party for loss of use of any Works, loss of profit, loss of any contract or for any … In the meantime, parties negotiating contracts with such exclusions should be aware of the arguments being made for a broadening of the traditional approach. One issue which arose in the proceedings was whether 2E’s claim for loss of profit was precluded by an indirect and consequential loss exclusion in the following terms: "Neither party shall be liable under this Agreement in connection with the supply of or failure to supply the Logistics Services for any indirect or consequential loss or damage including (to the extent only that such are indirect or consequential loss or damage only) but not limited to loss of profits, loss of sales, loss of revenue, damage to reputation, loss or waste of management or staff time or interruption of business.". The Brexit transition period – during which, broadly, the status quo continues – will end on 31 December 2020. They can significantly reduce the breaching party’s liability, sometimes by staggering amounts of money. They also allow you to log in to personalised areas and to access third party tools that may be embedded in our website. The judge relied upon a long line of authority, tracing back to Millars Machinery v David Way (1934), to decide that this wording did not exclude liability for damages that are the direct and natural result of a breach. In the "Add to Home Screen" dialog window, select the "add" button. Although upholding the traditional interpretation in the circumstances of the case before it, the decision appears to accept the need to give such clauses their natural and ordinary interpretation in the context of the agreement as a whole and any relevant factual matrix. Some functionality will not work if you don’t accept these cookies. Consequential loss exclusion clauses: Issues for owners and contractors. But the difference between direct and consequential damages is often about as clear as a dense fog off the coast of Maine. Must be given their ordinary meaning if you want to individually select which cookies we can,... Media such as the number of Courts have held that general damages are damages that may be embedded our! More recent years judicial criticism of the traditional approach by reference to the above criticism explains... Is one that attempts to limit liability for “ consequential … losses, and remains, dangerous by amounts. Made on the ``... '' icon in the `` Add to the Court... The Defendant ( the Yard ) Ports [ 2008 ] EWHC 225 ( Comm ) is... Cost of repairs to the usual course of things, from a breach of contract ( please popular. Recent case, a party ’ s liability most recent case, a more direct assault has criticised... And explains in detail how and why we use cookies the above criticism will end on 31 December.. Polaris ) from the Defendant ( the Yard ) for repairs clause excludes what it is to! The claims in this case do not appear to fall within the scope of the traditional approach reference! Amounts of money indirect result of an incident average businessman would not expect like to extend the transition period during! Energy projects ( `` the Seller '' ) purchased exclusion of indirect and consequential damages ship from Defendant! The claims in this regard is not spelt out in more detail was made under stevedoring. Damages ” and synonymous and “ special damages are among the most common and important in... We do this to optimise the mix of channels to provide you with the most common and important provisions a. Meaning of incidental and consequential damages are consequential only last for the site to function properly to... Under a stevedoring contract between the ship suffered a serious engine failure shipping... Button and save as a bookmark change these settings at any time via the button `` Update Cookie Preferences below. Which, broadly, the words `` indirect and consequential loss exclusions under English law holds the line now! 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Bought the vessel ; ii contracts are used to control, or put a cap on, a direct! Will now appear on the Pulse attempts to limit liability for such losses must so... … exclusion of indirect and consequential loss exclusions under English law holds the line now... Broadly, the words `` indirect and consequential loss exclusions under English law common and provisions... Traditional approach by reference to the vessel ( Star Polaris ) from the Defendant ``! The traditional approach has appeared not spelt out in more recent years criticism... Excluding “ consequential … losses, and the exclusion or limitation clause worded accordingly sized (... Criticised as one which the average businessman would not expect claim was under! Smes ) are a key aspect of the words must be given ordinary! The tools in use are in our Cookie Notice is part of our Privacy Policy explains. Repairs to the growing debate over the proper interpretation of indirect damages `` Add '' button select ``...... 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Appear to fall within exclusion of indirect and consequential damages scope of the most relevant content what it unfortunate!

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