It is common practice in international standard form EPC contracts (such as ENAA and FIDIC) to refer to both “indirect” and “consequential” loss or damage in exclusion of liability clauses. 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 … Therefore, the claims in this case do not appear to fall within the scope of the exclusion.”. Towage fees, agency fees, survey fees, off hire and off hire bunkers caused by the engine failure. Some functionality will not work if you don’t accept these cookies. These are “direct losses”. One of the most common types of clause is one that attempts to limit liability for “indirect or consequential” loss or damage. In order to qualify for funding, the remedial works must start on... China’s Belt and Road initiative has the potential to help nations across Central and Eastern Europe meet their diverse and growing infrastructure needs. After the considering the recent judicial criticism of the traditional approach noted above, O’Farrell J in the Technology and Construction Court accepted the submission “that any general understanding of the meaning of ‘indirect or consequential loss’ must not override the true construction of that clause when read in context against the other provisions in the Logistics Contract and the factual matrix”. Simply put, consequential damages typically are more significant when it comes to the amounts awarded. Indirect and consequential loss exclusions: English law holds the line for now. Analytics cookies collect anonymised information such as the number of site visitors or most popular pages. 1. exclusion of indirect damages. 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. For advice on construction contracts and other construction matters, he may be contacted at chee.yean.choy@sg.rajahtann.com. the exclusion of liability for indirect or consequential losses, and the exclusion or limitation clause worded accordingly. Press and hold the LawNow icon and then click "Add to home screen". We do this to optimise the mix of channels to provide you with our content. The cost of repairs to the vessel; ii. Such an interpretation has been criticised as one which the average businessman would not expect. To take full advantage of our website, we recommend that you click on “Accept All”. 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. 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 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, The judge confirmed that although exclusion clauses are no longer read narrowly, the words must be given their ordinary meaning. Technical cookies are required for the site to function properly, to be legally compliant and secure. Care should be taken when drafting to ensure that a clause excludes what it is supposed to. In the "Add to Home Screen" dialog window, select the "add" button. Not withstanding anything contained elsewhere in this Agreement and under any circumstance, for any reason whatsoever, YS shall not be liable for any incidental, ancillary, direct, indirect, special or consequential damages, including but not limited to lost profits, whether in tort or contract, and based on any theory of liability. In 2002, one member of the House of Lords stated that he wished to reserve the question as to whether the traditional approach was correct (Caledonia North Sea Limited v BT plc). The arguments made by Sony in this case would have dramatically expanded the reach of the clause in comparison to the traditional approach which is thought not to have resulted in a single reported case where losses have been effectively excluded. For instance, a purchase agreement will often provide that the liability of the seller under … Exclusion of liability for “indirect or consequential” losses. 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. 2. Such an interpretation has been criticised as one which the average businessman would not expect. 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. Indirect and Consequential Loss. The court held that although the liability of the ship owner represented a liability “to any other party”, it was nevertheless a direct liability which was not caught by the exclusion clause. The full report can... We would like to use cookies that will enable us to analyse the use of our websites and to personalise the content for you. Consequential Damages — consequential damages are an indirect result of a direct loss. Consequential loss exclusion clauses: Issues for owners and contractors. If you agree to this, please click "Accept all" below. Click on the 'menu' button again and select "Bookmarks". 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. 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. This case has increased the uncertainty around which losses will be consequential. 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. No Consequential Damages. 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