The direct and natural result of the fire was the destruction of the goods and the warehouse, causing lost profits and business interruption losses to the claimants. I have in front of me a contract—it’s for the sale of goods—that contains the following provision excluding certain kinds of damages: Neither party will be responsible or held liable for any consequential, special, or incidental losses or damages. Clauses that seek to exclude a party's right to damages are often subject to restrictive interpretation by the courts. Those categories, I argue, are not particularly helpful. Exclusion and limitation of liability clauses often exclude “lost profits” from the types of consequential damages that are recoverable. 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. 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. “consequential” in exclusion of liability clauses, both terms are commonly used in this context. The High Court’s decision in Star Polaris LLC v HHIC-PHIL INC is an interesting reminder of the debate surrounding exclusion clauses and the interpretation of “consequential loss”. As the recent Dow Chemical Canada ULC v. [For a follow-up to this post, see this March 2, 2010 blog post.] Victor P. Goldberg is the Jerome L. Greene Professor of Transactional Law at Columbia Law School. Columbia Law and Economics Working Paper No. Similarly, the exclusion of liability clause in the FIDIC Silver Book (Sub Clause The definition of consequential damages, also known as "special damages," refers to damages from an indirect result of an event or incident. Contracts often include language excluding compensation for consequential damages. Once again the interpretation of exclusion clauses limiting liability for “consequential losses” has come before the courts. Consequential Damages and Exclusion Clauses. from Oberlin College and an M.A. Victor P. Goldberg, Consequential Damages and Exclusion Clauses, 3 Criterion J. on Innovation 27 (2018). You can rely […] Therefore, the claims in this case do not appear to fall within the scope of the exclusion.” 29 Pages Posted: 16 Mar 2018 Last revised: ... the seller would be liable for the difference — the consequential damage exclusion would not apply; however, some claims for breach of warranty would be for consequential damages. by Arch Fletcher. For example, the exclusion of liability clause in ENAA 1996 (GC 30.2) refers to “any indirect, special or consequential loss or damage”. 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. But, will this type of clause always work to exclude recovery of any type of lost profit? 15 Sep 2004. Consequential loss exclusion clauses: Issues for owners and contractors. Courts have used concepts like foreseeability, natural result of the breach, and collateral business in their attempts to define the boundary. 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