According to the court, this clause was “unhappily drafted” because the supposed examples of damages intended to be excluded by the phrase “indirect or consequential loss or damage” were qualified by the parenthetical to only be excluded if they in fact constituted indirect or consequential loss or damage to begin with. Some functionality will not work if you don’t accept these cookies. The Brexit transition period – during which, broadly, the status quo continues – will end on 31 December 2020. In the example of the factory just given, it may be that loss of production during the period of rebuilding caused the loss of a particularly lucrative long-term contract. Our newsletter... We would like to use cookies that will enable us to analyse the use of our websites and to personalise the content for you. So, disclaimers of indirect damages should not be viewed as a substitute for explicit disclaimers of incidental and consequential damages, which always should be expressly disclaimed. In R (on the application of Thornton) v OGA [2020] EWHC 2615 (Admin)  the English courts considered, for the first time, whether a ‘letter of comfort’ given by the Oil and Gas Authority (“OGA”) concerning a change of control should be overturned. M&A transaction documents often contain an exclusion or limitation of the seller’s liability for ‘consequential’, ‘indirect’ or ‘special’ losses suffered by the purchaser. One of the most common types of clause is one that attempts to limit liability for “indirect or consequential” loss or damage. Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. Simply put, consequential damages typically are more significant when it comes to the amounts awarded. 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. Details concerning the tools in use are in our privacy policy. Buyers and sellers often negotiate the scope and types of damages subject to indemnification under the purchase agreement, including whether consequential damag… Referring to “indirect or consequential” losses is often ambiguous, so if there are particular types of losses that you wish to exclude, they should be specified. The ship owner (who engaged the seaman) paid these costs and compensation, and sought to pass them on to the negligent port authority. If you agree to this, please click "Accept all" below. 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.". Choy Chee Yean is a Partner with the Projects & Infrastructure Practice Group. We do this to optimise the mix of channels to provide you with our content. Loss of profits due to an interruption of normal business practices. Our combination of practice excellence and deep industry expertise provides a distinct competitive advantage to our clients, bringing together legal expertise, commercial insight and close professional support. Analytics cookies collect anonymised information such as the number of site visitors or most popular pages. Transforming Public Procurement – the Final Frontier? ICLR, 2017, 34(3), pages 210-225, 2 Entertain Video Ltd & Ors v Sony DADC Europe Ltd [2020] EWHC 972. The EU would like to extend the transition period, to negotiate a fuller trade deal, but the UK has said no. The cost of repairs to the vessel; ii. Introduction. This website uses cookies so that we can provide you with the best user experience possible. 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 … Consequential loss exclusion clauses: Issues for owners and contractors. This case has increased the uncertainty around which losses will be consequential. If you want to individually select which cookies we can set, please click "Select preferences" below. The arbitra… Exclusion of Consequential Damages. The Claimant ("the Buyer") purchased a ship from the Defendant ("the Seller"). The claimant (the Buyer) bought the vessel (Star Polaris) from the defendant (the Yard). (9) A statement in the following language: This warranty gives you specific legal rights, and you may also … 2E published, marketed and sold various home entertainment media such as Blu-ray discs, DVDs and CDs. Law-Now Zones provide expert analysis on specialist topics. For example, Clause 17.6 of the FIDIC Silver Book provides: “Neither Party shall be liable to the other Party for loss of use of any Works, Small and medium sized enterprises (SMEs) are a key aspect of the UAE’s economy helping drive growth and diversification. Indirect and consequential loss exclusions: English law holds the line for now. Click on the 'menu' button again and select "Bookmarks". But the difference between direct and consequential damages is often about as clear as a dense fog off the coast of Maine. 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). Save Law-Now to your mobile device home screen for easy access, 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, The traditional approach of English law has been that exclusions for “consequential” or “indirect “losses will usually exclude only those losses falling within the second category described above. 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). Care should be taken when drafting to ensure that a clause excludes what it is supposed to. As such, the Court concluded that this clause did not exclude lost profits in the form of direct damages. Keeping these cookies enabled helps us improve our website and provide you with the most relevant content. Such an interpretation has been criticised as one which the average businessman would not expect. Click on the "..." icon in the bottom-right of the screen. Exclusions of consequential damages are among the most common and important provisions in a wide variety of contracts. In 2015, a judge of the Commercial Court who has since been appointed to the Supreme Court, indicated that the traditional approach was to be “deprecated” (Scottish Power UK Plc v BP Exploration Operating Company Ltd). For example, if the breach involved the destruction of a factory, both the cost of rebuilding and the loss of production suffered during rebuilding would fall within this first category. They also allow you to log in to personalised areas and to access third party tools that may be embedded in our website. 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 … To take full advantage of our website, we recommend that you click on “Accept All”. In order to qualify for funding, the remedial works must start on... “For too long, modern and innovative approaches to public procurement have been bogged down in bureaucratic, process-driven procedures. For example, consequential damages are often awarded to reimburse an accident victims loss of wages, when he could not work for weeks after being injured in an automobile accident. Technical cookies are required for the site to function properly, to be legally compliant and secure. Press and hold the LawNow icon and then click "Add to home screen". However, in order for someone to win consequential damages in a lawsuit, the damages must have been a foreseeable result of that incident. Limitation or exclusion clauses which speak only of "consequential loss" or "indirect or consequential loss" ordinarily will not be effective to limit or exclude liability for direct loss of production, loss of revenue or loss of profit. Launch the website from your Home screen by tapping its icon. Some companies have adopted a policy that no contract can be signed unless the company is specifically excused, in writing (and sometimes in ALL CAPS), from this scary-sounding exposure. Indirect and Consequential Loss. You can change these settings at any time via the button "Update Cookie Preferences" in our Cookie Notice. Some functionality will not work if you don ’ t Accept these cookies the 'menu ' button and save a! 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