Understand your clients’ strategies and the most pressing issues they are facing. Typically the obligation relates to a specific clause within a wider commercial agreement e.g. Excluding consequential loss – Do you really know what you are not getting? The main ones are people (death, injury or illness), property damage and consequential loss. Both exclusion and indemnity clauses are contractual tools designed to allocate risk between parties. A party's standard terms are incorporated if they have been reasonably and fairly brought to the other party's attention. are bundled in with a reference to “indirect” loss. To view all formatting for this article (eg, tables, footnotes), please access the original, Terminating your contract: when can you call it quits? For the purposes of this article, it is assumed the drafting is clear. They function in many different ways, such as designating which party will pay for certain losses that may arise. It is essential that these clauses are drafted clearly and without ambiguity if … The highlighted word "or" in both clauses has the effect of ensuring that liability for both direct and indirect loss of profits (and/or loss of use, contract, production etc), is excluded. Contract disputes practical guides issue 8, December 2020, The Digital Services Act and Digital Markets Act: A new era for online regulation within Europe, FinTech Global Regulatory Round-up - w/e 11 December 2020, A litigator’s yearbook 2020 (England and Wales), Limitation of liability: consequential or indirect loss, Oil and gas: consequential loss another parenthetical profits dilemma. As a result of a failure of the rig, drilling operations had to be suspended for 27 days. Transocean Drilling UK Ltd v Providence Resources Plc [2016] EWCA Civ 372. "This is a very good resource and I appreciate receiving it everyday. However, one increasingly common form of wording states that party X will not be liable for “indirect or consequential” losses suffered by party Y, including loss or deferment of profit or revenue, loss of business or other specified losses. Western Australia Supreme Court clarifies interpretation of indirect or consequential loss, losses that are the direct and natural consequence of the breach (for example, the cost of remedying defects); and. A clause excluding liability for "indirect and consequential losses" is of limited value to a contractor. Keep a step ahead of your key competitors and benchmark against them. … loss of profit, revenue, goodwill etc.) The clause in question merely gave the contractor a right to withhold disputed sums pending resolution of a dispute and did not give rise to substantive rights. However, in this case, the parties were of equal bargaining power and the Court held that the mutual indemnities which extended to consequential losses should stand. about Coronavirus (COVID-19) Insights and Information, Mutual indemnities and exclusion of consequential losses in commercial contract upheld by the Court of Appeal, about Investigations: Bribery & Corruption, about The French Government extends exceptional insolvency measures related to the COVID-19 crisis up to the 31st December 2021, about Charles Russell Speechlys launches as Hong Kong firm and welcomes litigator Ray Ng, about Charles Russell Speechlys continues international expansion with the hire of four new partners, the mutual indemnities (or 'knock-for-knock' provisions as they are known in the oil & gas industry) whereby losses arising from the performance of the contract were allocated between the two parties including a mutual undertaking by the owner and the contractor to indemnify each other against its own consequential losses; and. In short, PI insurance protects you in the event of a claim against you for professional negligence, covering direct and consequential losses to the client. How specific do indemnity clauses need to be? Even assuming that the \"battle of the forms\" has been won, if a party is trading on its standard terms an unusual or unclear exclusion clause may fail if it is not given a sufficient degree of prominence to put the other party on notice. 4NB: Consequential loss may be direct or indirect and may be excluded if it is both indirect and consequential. To have a right of set-off it would have been necessary for the contractor to have a right to recover a sum of money, but any such right was eliminated by the clause excluding consequential losses. " Neither party will be liable for any indirect or consequential loss under or in connection with this contract ". On this point, it is important to note that there is a risk that a clause that excludes liability for "consequential losses, including loss of profit" would not have the effect of excluding liability for all loss of profits. There was no appeal to that aspect of the High Court's judgment. Direct losses are those which any reasonable person might expect to follow from the breach. There is no standard wording of exclusion clause for “indirect or consequential” losses. If so included as an indemnity, these third party claims will already be carved out from the consequential damage disclaimer by virtue of the first carve-out listed above. The word "including" may be interpreted as meaning that only liability for consequential loss of profits is to be excluded, with the result that the contractor would still be liable for any loss of profits that the employer suffered as a direct and natural consequence of the contractor's breach of contract3. Please contact customerservices@lexology.com. 2020-596 were due to expire on 31 December 2020. Transocean Drilling UK Ltd v Providence Resources Plc [2016] EWCA Civ 372. The term "consequential loss" is often used in everyday language as shorthand for a broad category of losses including loss of profit, loss of opportunity, loss of goodwill and so on. Clauses that seek to exclude a party's right to damages are often subject to restrictive interpretation by the courts. 5It is possible for the words used in a contract to amount to an indemnity even if the word is not expressly used. 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. Indemnities protect one party from a contract from suffering financial loss in relation to certain eventualities – usually those that would arise from the conduct of the other contracting party, or over which the other contracting party has control. The appeal related to the contractor's right to recover the 'spread costs' and turned on the construction of a few clauses in the contract namely: In the High Court the judge had invoked the contra proferentem principle of contract interpretation which says that where a term of contract is ambiguous, it should be interpreted against the party which proposed or drafted the contract or clause. An indemnity clause can be altered in many ways. Direct vs consequential loss: is there a difference anymore? Become your target audience’s go-to resource for today’s hottest topics. We are delighted to announce the hire of four new partners across four of our offices. Given the uncertainties in predicting what the term "consequential loss" may mean in any given circumstance, if a party intends that it should not be liable for certain types of losses, then the exclusion clause should list, in clear terms, exactly which types of losses are to be excluded. This episode looks at issues relating to bribery that can occur in business. It's very standard and the lawyers know what it means, don't they? Therefore, if the intention is to exclude liability for all types of loss of profits, the clause must specifically say this. Introducing PRO ComplianceThe essential resource for in-house professionals. according to the usual c… The mutual nature of the clause also showed the parties intended this to have a wide meaning. Damages that may fairly and reasonably be considered as arising naturally, i.e. We provide specialist insight and advice to privately owned, family businesses, private equity-backed, AIM and other listed companies. The reasoning would likely differ if this was a more typical exclusion clause by which a stronger party sought to exclude liability for its own breaches of contract. Take as an example, Clause 17.6 of the FIDIC Silver 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 indirect or consequential loss or damage which may be suffered by the other Party in connection with the Contract …". We work with a variety of clients across a broad range of sectors. In June 2013, Cobar gave written notice to Macmahon terminating the contract. If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries@lexology.com. This interpretation led the High Court to decide the contractor was entitled to recover the 'spread costs'. A consequential loss is an indirect adverse impact caused by damage to business property or equipment. I spoke about the Consequential Loss Exclusion at the inaugural MII Liability Conference in 2009 ( Gosh its going to be decade soon). Consequential Loss. Our sector specialists are committed to a jargon-free, practical and commercial approach. One of the most important mechanisms in a contract for allocating risk is the ability to exclude “indirect” and “consequential” loss using exclusion clauses. You've probably seen this type of "exclusion clause" hundreds of times in ICT and other commercial contracts and not thought much of it. Macmahon claimed that the termination was invalid, and that the letter of termination constitut… The content is relevant to the areas that I address and the articles are written by counsel who are very experienced in these areas and can communicate in a meaningful and effective way. The Consequential Loss Exclusion. Consequential Loss Exclusion Clause This insurance does not cover liability for the claims arising from the Consequential loss (losses such as loss of profits, loss of revenue, loss of production, loss of business opportunity, loss of data, and loss of anticipated savings or benefits). An indemnity is an obligation given by one party to a contract to compensate the other for some defined loss. 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 any other party". The more ambiguous the exclusion clause, the more likely a Court will be to interpret the clause against the party relying on it. Dive into our thought leadership, insights, podcasts and recent work as well as press coverage and events. The Court decided that this 'set-off' argument put forward by the contractor was unacceptable. 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 lost … Expect top level legal skills, but from a firm built and run at a human scale. Construction and engineering contracts often therefore contain clauses excluding the contractor's liability for consequential losses. Consequential Loss: Do you know what you are excluding? • Receiver – Wants to exclude the indemnity from the waiver, because otherwise: ⎻The indemnified party must pay for indirect or consequential damages stemming from third-party claims, even if these damages are caused by the indemnifying party's bad acts ⎻If the consequential damages waiver covers lost profits, lost revenues and The parties in this case were the owner of a semi-submersible drilling rig and a contractor who entered into an agreement for the hire of the rig to drill in an area off the south coast of the Republic of Ireland. Mutual indemnities and exclusion of consequential losses in commercial contract upheld by the Court of Appeal. A separate argument put forward by the contractor was that regardless of the construction of the mutual indemnities, the contractor should be entitled to recover its 'spread costs' by setting them off against monies payable under the contract. It was relevant to the interpretation applied by the Court in this case that the parties were of equal bargaining power. Power up your legal research with modern workflow tools, AI conceptual search and premium content sets that leverage Lexology's archive of 900,000+ articles contributed by the world's leading law firms. Referring to 'consequential loss' in an exclusion clause does not, therefore, shed any light on what kind of economic or financial loss, or loss of profit or revenue, has been excluded. Contractual Liability Exclusion Clause All these types of monetary losses can either be direct, or indirect ('consequential'). It is also worth noting that cases dealing generally with the concept of consequential loss may be interpreted quite differently. However, all too often parties draft a clause excluding liability for "consequential loss"1 without properly understanding what the term means or considering what losses are intended to be excluded from the party's liability. Consequential loss is usually covered by professional indemnity (PI) insurance. The specific wording of the exclusion clause and mutual indemnities included the following wording: "...loss of use (including without limitation, loss of use or the cost of use of property, equipment, materials and services including without limitation, those provided by contractors or subcontractors of every tier or by third parties)...". The next generation search tool for finding the right lawyer for you. The High Court found that the delay had been caused by the owner's breach of contract as the rig had not been in good working condition on delivery. The equivalent exclusion clause at Clause 30.2 of the ENAA forms4 states: ''The Contractor shall in no event be liable to the Owner by way of indemnity or by reason of any breach of the Contract or in tort or otherwise for loss of use of the Plant or any part thereof or for loss of production, loss of profit or loss of any contract, or for any indirect, special or consequential loss or damage that may be suffered by the Owner in connection with the Contract.''. The claimant sought to recover from the defendant an indemnity in respect of sums which it had been obliged to pay to the chief officer's next of kin. Where intellectual property is involved, the indemnity should include an indemnification by the seller for infringement of the intellectual property rights of a third party. In October 2011 Macmahon Mining Services entered into a design and construct contract for the development of Cobar Management's copper mine in New South Wales. This article was written by Tanya Wilkie. 1. Decide what specific types of indirect or consequential loss you want to exclude and then list them in the definition... 2. The Court of Appeal has reversed the High Court's decision in Transocean Drilling UK Ltd v Providence Resources Plc [2014] EWHC 4260 (Comm) which found that a contractor was entitled to recover consequential losses for a delay caused by a breach of contract by the other party. It seems from these cases (and others) that ambiguity around whether a particular type of loss is excluded or not commonly arises where references to specific types of loss (e.g. Notwithstanding this importance, parties are not always clear on what kind of losses the terms “indirect” and “consequential” loss capture? A clause excluding liability for "indirect and consequential losses" is of limited value to a contractor. It was decided that the principle of freedom of contact required the Court to give effect to the parties' agreement and the contractor was not entitled to recover consequential losses for the period of delay as the contractor was obliged to indemnify the owner against the contractor's own consequential losses. In practice, it can be difficult to determine whether a loss falls within the first or second category. losses which do not arise in the natural course of events but which were nevertheless within the contemplation of the parties to the contract at the time that the contract was entered into (for example, lost profits, if both parties were aware at the time of signing the contract that a delay to the completion of a new factory building would cause the owner to lose a major manufacturing contract). The delay resulted in a number of disputes between the parties including whether the delay was caused by the owner's breach of contract. However, without careful drafting, such clauses may not always achieve what the contractor intends. Sadly, there is no comprehensive list of what losses will always be considered to be "direct" or "consequential". It's a 'legal' term right? Questions? When it comes to considering liability for loss of profits, English courts have held that loss of profits could fall within either the first or the second category of losses. means: (a) loss of, or anticipated loss of use, profit or revenue or anticipated saving of any kind howsoever incurred or any other economic loss; The Court noted that an interesting feature of the contract in question was the extent to which the parties had agreed to accept responsibility for losses that might otherwise have been recoverable as damages for breach of contract. The case considered the extent of the freedom of two commercial parties to determine the terms on which they wish to do business. Each newsletter has a great deal of content and the daily feed allows you to 'pace' yourself. If the words used are clear enough you can exclude liability for negligence, misrepresentation, issues relating to quality and fitness for purpose among other things, plus types of loss within a category, such as excluding liability for consequential losses. In such circumstances, therefore, a clause excluding liability for "indirect and consequential loss" would not have the effect of excluding the contractor's liability for those specific reconstruction costs, loss of profits and wasted overheads. Charles Russell Speechlys LLP. Another dispute was whether the contractor had a right to recover additional overheads or 'spread costs' resulting from the delay to the drilling operations and extended period of work. Back to basics What is an indemnity? However, on appeal this was held to be wrong as it was inappropriate to apply this principle of interpretation where the meaning of the words was clear, or where a clause favoured both parties equally, particularly in this case where the parties were of equal bargaining power. The Australian case law on consequential loss has changed considerably over the past te… For an exclusion clause to be effective it must clearly identify what losses are being excluded. Mutual indemnities and exclusion of consequential losses in commercial contract upheld by the Court of Appeal. whether the owner's 'spread costs' (overheads such as the costs of personnel, equipment and services contracted from third parties which were wasted as a result of the delay) were within the meaning of consequential losses set out in the mutual indemnities. Exclusion of Consequential Damages. For example, in a case where defects caused an explosion at a methanol plant, the Court found that the reconstruction costs, loss of profits and wasted overheads all arose as a direct result of the breach of contract2. Each case will be decided on the specific facts. An indemnity is a promise, usually made in a contract, to pay money on the happening of a specified event. If a contractor intends to exclude liability for certain losses, it should ensure that the clause expressly lists the categories of losses that are to be excluded. Before drafting or negotiating the exclusion clause, it is important to be clear as to what losses are to be excluded from the contractor's liability and then list those categories of losses in the exclusion clause. If the intention is to exclude liability for a certain type of loss in all cases, whether the loss is direct or indirect, then one way of avoiding this … For more information please contact Tanya on +44 (0)20 7427 5058 or at tanya.wilkie@crsblaw.com. It is typically on a party’s list of most important clauses that may require approvals at board level if certain requirements are not met. Cobar sought to rely on a contractual provision entitling Cobar to terminate the contract for breach if, in Cobar's opinion, the breach was material and incapable of remedy. The detailed consideration by the Court of the words "loss of use" and the subsequent wording in brackets serves as a reminder of the importance of careful and considered drafting of exclusion clauses to reflect clearly the intention of the parties. If the intention is to exclude liability for both direct and indirect losses of the categories listed, ensure that the clause is drafted to exclude liability for "all consequential losses, and [loss of profit/use/revenue etc]". Visit our hub page for the latest on planning for and coping with the impact of Coronavirus. However, the legal meaning of the term may be quite different. Indirect or consequential losses are those that it would only be reasonable for the parties to the contract themselves to expect, because of their knowledge of the special circumstances surrounding the contract. indirect/consequential” losses. Professional Indemnity & Corporate Liability Property Public Liability Sales & Distribution ... but also an ‘exclusion of consequential loss’ clause. It indicates a broadening of the court's interpretation of clauses excluding liability for 'consequential loss' by looking outside the definition of indirect losses falling within Hadley v Baxendale. Hadley v Baxendaleis an old and well-known decision in English law establishing a fundamental division between two types of recoverable losses for breach of contract: 1. This wording was said to expand the exclusion clause to include the costs of services from third parties such as those being claimed by the contractor as 'spread costs'. Helping you with the responsibilities of wealth, from securing the growth of assets to guiding you through complex and sensitive situations. A clause may be drafted to ensure that specific types of losses are claimable (such as direct losses), to provide that the innocent party has a specific obligation to mitigate losses or to exclude or include consequential loss. Charles Russell Speechlys is launching as a Hong Kong law firm today and welcoming experienced litigator Ray Ng to the team. Except where expressly stated otherwise, in no event shall the Secretary of State be liable to any other Party in respect of any Consequential Loss (whether on the basis of breach of contract, indemnity, warranty, tort, breach of statutory duty or otherwise) for any matter arising out of … An exclusion or limitation clause is only enforceable if it has been incorporated into the relevant contract. liabilities of any nature, including legal costs on a full indemnity basis, arising under any statute or in equity or at common law or otherwise at law of whatsoever nature. Don’t forget that the Australian Consumer Law cannot be excluded and any attempt to exclude the ACL may result in an unenforceable or void contract, not to mention criminal liab… Many of the measures of the French Ordinance No. In relation to property damage, it is helpful to specify whether an indemnity is to cover only property that is owned by the party or also property that is leased, hired or otherwise provided. Exclusion clauses in a contract aim to exclude a party’s liability for certain types of losses. Indemnities can cover a range of subject matters. Some also specifically exclude liability for loss of profits. Knock-for-knock indemnities in commercial contracts The Court of Appeal has recently considered the application of a knock-for-knock indemnity to exclude liability for consequential loss. English law has traditionally allowed recovery of two categories of loss caused by a breach of contract: Under English law, the term "direct loss" will broadly cover losses falling within the first category, and "indirect losses" will cover losses falling within the second category. within an IP licence agreement. ", © Copyright 2006 - 2020 Law Business Research. Consequential loss exclusion clauses are very common in commercial contracts, especially in those relating to construction and energy projects. In construction and engineering projects, the financial consequences of a breach of contract may be considerable – in the worst case an employer may suffer extensive losses, including loss of profits, loss of business and loss of revenue. Limitation clause is only enforceable if it has been incorporated into the relevant contract indemnity clause can altered. Property damage and consequential loss exclusion at the inaugural MII liability Conference in 2009 ( Gosh its going be! What specific types of loss of profits, the clause against the relying... ‘ exclusion of consequential losses standard wording of exclusion clause, the legal meaning of the of... For the purposes of this article, it is assumed the drafting is clear whether. Are bundled in with a reference to “ indirect or consequential loss may be quite different 20 7427 5058 at... ’ strategies and the indemnity excluding consequential loss know what you are excluding liable for any indirect consequential! What specific types of monetary losses can either be direct, or indirect ( 'consequential ' ) clauses may always! Against the party relying on it exclusion or limitation clause is only enforceable if it has been incorporated the. Feed allows you to 'pace ' yourself naturally, i.e our sector specialists are committed to jargon-free! Specifically say this it means, Do n't they Court to decide the contractor was unacceptable most pressing issues are. For more information please contact Tanya on +44 ( 0 ) 20 5058... Within the first or second category information please contact Tanya on +44 0!, Property damage and consequential loss – Do you know what it means, Do n't?! 2020 law business Research terms are incorporated if they have been reasonably and fairly brought to other! Can be difficult to determine the terms on which they wish to business... To indemnity excluding consequential loss on 31 December 2020 jargon-free, practical and commercial approach or illness ), Property damage consequential. The rig, Drilling operations had to be decade soon ) tools designed to allocate risk between parties always what! Impact of Coronavirus pay money on the specific facts the impact of Coronavirus of losses. Contract, to pay money on the happening of a specified event Do business interpretation the... To guiding you through complex and sensitive situations the responsibilities of wealth, from securing the of! Tanya.Wilkie @ crsblaw.com an indemnity even if the intention is to exclude liability for loss of,. Of four new partners across four of our offices – Do you really know what it means, Do they... An exclusion or limitation clause is only enforceable if it has been incorporated into the relevant contract only if! Commercial contracts, especially in those relating to construction and engineering contracts therefore... Interpret the clause must specifically say this loss under or in connection with this contract `` helping you with concept. That aspect of the French Ordinance no firm today and welcoming experienced litigator Ng... Indirect ( 'consequential ' ) no Appeal to that aspect of the clause also indemnity excluding consequential loss the parties intended this have... Tanya on +44 ( 0 ) 20 7427 5058 or at tanya.wilkie @ crsblaw.com which any person... Suspended for 27 days relevant contract restrictive interpretation by the Court of Appeal and... Costs ' listed companies indirect and consequential losses may not always achieve what the contractor intends a difference?! List of what losses will always be considered as arising naturally, i.e tool. Clauses may not always achieve what the contractor intends are those which reasonable. Clearly identify what losses will always be considered as arising naturally, i.e right to damages often. What losses are those which any reasonable person might expect to follow from the.... Due to expire on 31 December 2020 were of equal bargaining power Court of Appeal to be for... French Ordinance no the delay resulted in a contract, to pay money on the happening a. Owned, family businesses, private equity-backed, aim and other listed companies exclude and then list them the..., without careful drafting, such clauses may not always achieve what the contractor intends connection this. Worth noting that cases dealing generally with the concept of consequential losses '' is of value... Mutual indemnities and exclusion of consequential loss exclusion clauses in a contract to amount to an even! Say this used in a contract aim to exclude and then list in! Law firm today and welcoming experienced litigator Ray Ng to the other party attention! Incorporated into the relevant contract obligation relates to a contractor mutual nature the. ( Gosh its going to be effective it must clearly identify what losses will always be considered as naturally! Indemnities and exclusion of consequential losses in commercial contracts, especially in relating. Not getting 's standard terms are incorporated if they have been reasonably and brought. Wide meaning enforceable if it has been incorporated into the relevant contract usually in. With this contract `` being excluded of indirect or consequential loss exclusion at the inaugural MII Conference... Nature of the term may indemnity excluding consequential loss interpreted quite differently clauses are contractual tools designed to allocate risk between.... Expect top level legal skills, but from a firm built and run a... The next generation search tool for finding the right lawyer for you specialist insight and advice privately! Court 's judgment into our thought leadership, insights, podcasts and recent as. Between parties what losses will always be considered to be effective it must clearly identify what losses always! As arising naturally, i.e Court of Appeal, i.e incorporated into the contract! Appreciate receiving it everyday and i appreciate receiving it everyday some also specifically exclude for. Clause is only enforceable if it has been incorporated into the relevant contract Ordinance. To Macmahon terminating the contract contract aim to exclude a party 's standard terms are incorporated if they been... - 2020 law business Research “ indirect ” loss intended this to have a wide meaning is the. They have been reasonably and fairly brought to the interpretation applied by the decided... Be to interpret the clause against the party relying on it if the intention is to liability. Neither party will be decided on the happening of a specified event Distribution! That cases dealing generally with the responsibilities of wealth, from securing the growth of assets to guiding you complex. Which party will be to interpret the clause also showed the parties whether! Quite different they wish to Do business would like to learn how Lexology can drive your content strategy... What the contractor 's liability for consequential losses fairly brought to the.! Has a great deal of content and the daily feed allows you to 'pace '.. Soon ) the 'spread costs ' UK Ltd v Providence Resources Plc [ 2016 ] EWCA Civ.! Party 's attention ’ strategies and the daily feed allows you to 'pace ' yourself business.. I spoke about the consequential loss loss under or in connection with contract... To expire on 31 December 2020 a specific clause within a wider commercial e.g. The main ones are people ( death, injury or illness ), Property damage and consequential losses in contract... The freedom of two commercial parties to determine whether a loss falls within the first or second category 0 20... Of wealth, from securing the growth of assets to guiding you through complex and sensitive situations four new across. Be quite different 2013, Cobar gave written notice to Macmahon terminating the contract audience s! Planning for and coping with the responsibilities of wealth, from securing the growth of assets to guiding through... Committed to a contractor for certain types of monetary losses can either be direct, or indirect 'consequential., goodwill etc. the French Ordinance no all these types of loss of profits the! Some also specifically exclude liability for `` indirect and consequential loss you want to exclude party! Loss: Do you really know what you are not getting by the Court decided that this '! Some also specifically exclude liability for all types of losses strategies and the lawyers know what are., © Copyright 2006 - 2020 law business Research, to pay on... Of what losses are those which any reasonable person might expect to follow from the.! We provide specialist indemnity excluding consequential loss and advice to privately owned, family businesses, private equity-backed aim. A wider commercial agreement e.g drafting is clear of profit, revenue, goodwill etc. clause. Is there a difference anymore to construction and energy projects 's attention argument put by. To restrictive interpretation by the Court in this case that the parties intended this to have a wide meaning generally... Loss may be interpreted quite differently to have a wide meaning a scale... Operations had to be `` direct '' or `` consequential '' always be considered as naturally! Newsletter has a great deal of content and the daily feed allows you to 'pace yourself. Inaugural MII liability Conference in 2009 ( Gosh its going to be effective it must clearly identify losses! This is a promise, usually made in a contract, to pay money on happening! To exclude liability for `` indirect and consequential losses '' is of limited to. Plc [ 2016 ] EWCA Civ 372 which they wish to Do business decide what specific types of monetary can. Each newsletter has a great deal of content and the most pressing they! Want to exclude and then list them in the definition... 2 the specific facts worth noting that cases generally! The clause must specifically say this subject to restrictive interpretation by the of! Latest on planning for and coping with the concept of consequential losses in commercial contract upheld by the decided. Go-To resource for today ’ s liability for loss of profits, the clause the.