CISG Advisory Council* Opinion No. 17

ANNEX 2 – LIMITATION AND EXCLUSION CLAUSES (EXAMPLES)

 Limitation of damages

(Indirect and special damages excluded)

Contract for the sale and purchase of Brazilian iron

11 Liability
11.1 Neither the SELLER nor the BUYER shall be liable, whether in contract, tort or otherwise, for any indirect, punitive, consequential or special losses, damages or expenses of any kind directly or indirectly arising out of or in any way connected with the performance of this CONTRACT. The SELLER shall in no circumstances be liable for more than the difference between the contract price and the market price, based on the nearest available market, as the date of any breach of the CONTRACT.

(Damages limited to a cap)

Contract for the sale and purchase of Brazilian iron
12.2. The maximum aggregate liability of one Party to the other from all sources in relation to this Contract or any other obligation, whether in contract, statute or regulation, tort (including negligence) strict liability or otherwise shall not exceed the amount of the Contract Year or such lesser amount as may be expressly provided for under the provisions of this Contract, provided, however, that such limitation of liability shall not apply to liability resulting from fraud, willful misconduct or gross negligence by the Parties (which shall not counted for the purposes of determining whether the maximum liability has been reached). In addition, neither of the Parties have any liability to each other for indirect, incidental, special, moral or consequential damages or any kind arising from or attributable to this Contract.

(Damages limited to a cap)

Contract for the acquisition of a Brazilian company (quota purchase agreement)
5.5. The total amount of losses subject to indemnification by the seller under this section shall be limited to the aggregate amount of R$ 15,000,000.00 and the amount effectively received by the seller as earn-out consideration calculated in accordance with schedule 3.3, and the purchaser recognises and agree that the limitation of liabilities set forth herein is an essential condition to seller to enter into this agreement.

(Damages limited to a cap, except in case of gross negligence)

Notwithstanding the above, the limit of cumulative liability under paragraph B shall not apply to SELLER’s liabilities arising from gross negligence and willful acts of SELLER for which SELLER’s liability under CONTRACT shall be unlimited.

(Damages insured by purchaser and special, indirect, incidental and consequential damages excluded)

Contract for the sale of turbine spare parts
ADD TO CLAUSE 11.1 (SELLER’S STANDARD TERMS – ECE 188)

[The Seller] is not responsible for any damage which are insured by Purchaser or for any special, indirect, incidental or consequential damages including but not limited to loss of profit, loss of power, loss of use, loss of revenue, cost of capital or costs due to interruption of power supply.

(Certain types of damages limited – short version)

Neither party shall be liable (whether in contract, tort (including negligence) or otherwise) for any loss of profit, loss of business or of revenues, loss of goodwill or reputation, whether caused directly or indirectly, or for any indirect, incidental, punitive or consequential loss, damage, cost or expense.

(Consequential loss defined)

Consequential Loss
For the purposes of this article the expression “Consequential Loss” shall mean: 
(i) consequential or indirect loss under English law; and 
(ii) loss and/or deferral of production, loss of product, loss of use, loss of revenue, profit or anticipated profit (if any), in each case whether direct or indirect to the extent that these are not included in (i), and whether or not foreseeable at the EFFECTIVE DATE. 


Notwithstanding any provision to the contrary elsewhere in the AGREEMENT and except to the extent of any agreed liquidated damages (including without limitation any predetermined termination fees) provided for in the AGREEMENT, the BUYER shall save, indemnify, defend and hold harmless the SELLER GROUP from the BUYER GROUP’s own Consequential Loss and the SELLER shall save, indemnify, defend and hold harmless the BUYER GROUP from the SELLER GROUP’s own Consequential Loss, arising from, relating to or in connection with the performance or non-performance of the AGREEMENT.

(Excluded damages defined)

(a) For purposes of this Agreement's limitation(s) of liability, the term = Excluded Damages = refers to consequential, indirect, special, punitive, exemplary, or similar damages arising from any breach of this Agreement. The term encompasses, for example, the following: (1) loss of profits == from collateral business arrangements ==; (2) damages from business interruption; (3) loss of use; and (4) loss of data or privacy or confidentiality.


(b) For the avoidance of doubt, the term = consequential damages = refers to damages that the breaching party could not reasonably have foreseen upon entering into this Agreement; and



(c) For the avoidance of doubt, the term = Excluded Damages = does not encompass incidental damages, namely reasonable expenses incurred by a party incident to a breach or delay by another party; that is to say, incidental damages are not excluded.

(Broad effect of limitation)



The parties have specifically agreed that all limitations of liability set forth in this Agreement are to apply: (1) to all claims for damages or other monetary relief, whether alleged to arise in contract, tort, or otherwise, and (2) even if the allegedly-liable party was advised, knew, or had reason to know of the possibility of Excluded Damages and/or of damages in excess of the relevant Damages Cap, if any; and (3) even if a limited remedy fails of its essential purpose.

(Parties’ liability not limited in case of fraud or willful misconduct)

Exclusive Remedy – The indemnification provisions contained in this Article 10 shall constitute the exclusive remedy of the Parties in connection with this Agreement and the transactions contemplated hereby other than claims arising out of willful misconduct or fraud by a Party.

(Deposit retained)

Default by buyer: if buyer fails to perform the contract within the time specified, the deposits(s) made or agreed to be made by buyer may be retained or recovered by or for the account of seller as liquidated damages, consideration for the execution of the contract and in full settlement of all claims; whereupon all parties shall be relieved of all obligations under the contract; or seller, at his option, may proceed at law or in equity to enforce his rights under the contract.

(Earnest money deposit)

Horse sale agreement

  1. PURCHASE PRICE.

3.1 […]

3.2 The Purchase Price shall be paid as follows: Buyer shall pay a non-refundable earnest money deposit of $___________________Dollars in cash or readily available funds. It is expressly understood by the Buyer that the nonrefundable earnest money deposit will be applied toward the Purchase Price if the Purchase Contingency is satisfied or waived. In the event the contingency is not satisfied, the Seller shall retain the non-refundable earnest money deposit in consideration for Horse being unavailable for sale to another Buyer during the Inspection Period.

3.3. […]

Limitation of remedies

(Liability limited to replacement of goods)

The Company warrants only that all goods shall be of merchantable quality and in accordance with specifications. It will replace without charge f.o.b. point of destination, Dominion of Canada, all goods shown to be otherwise than as warranted. Liability is limited to such replacement and the Company shall in no case be liable otherwise or for indirect of consequential damages.

(Liability limited to repairing or replacing a defective part)

Our obligation under this Warranty shall be limited to repairing a defective part, or at our option, refunding the purchase price or replacing such part or parts as shall be necessary to remedy any malfunction resulting from defects in material or workmanship as covered by this Warranty.

Exclusion of liability

(Exclusion of liability)

Contract for the supply of a remote network operations center service

[...] neither party will be liable to the other for any damage to software, damage to or loss of data, loss of profit, anticipated profit, revenues, anticipated savings, goodwill or business opportunity, or for any indirect or consequential loss or damage. 



(Supplier’s liability excluded)

Industrial Machinery suppliers will not be liable for any loss or damage whatsoever which is due to late or defective delivery; defective, faulty or negligent workmanship; or defective or faulty material; or any act, default or omission of its employees, suppliers or subcontractors.

(Vendor’s liability excluded)

The Vendor shall not be under any liability to the Purchaser for any defects in the goods or for any damage, loss, death or injury (other than death or personal injury caused by the negligence of the Vendor) resulting from such defects or from any work done in connection therewith

(Seller’s liability excluded)

The delivery times provided are merely indicative and depend on procurement opportunities. The delivery times will be respected to the extent possible. Delays in delivery cannot be the basis for cancellation of the order or for claims to compensation or damages. No penalty is applicable in the event of delay, regardless of any notice to the contrary.

(Seller’s liability excluded)

B shall bear all liabilities, in contract, in torts (including negligence) or otherwise, for any damage whatsoever, to person or property, sustained during the period of time from the delivery of the prototype by A until restitution of the latter to A pursuant to article 6.

Accordingly, A shall bear no liability whatsoever for any kind of damage, given the fact that the prototypes are delivered “as such”, that no warranty whatsoever is granted by A with regard to the performance, quality or design of such prototypes and finally that B alone is responsible for installing the prototypes on its facilities and for the testing work to be performed therewith.

(Seller’s liability excluded)

Contract for the acquisition of a Brazilian pharmaceutical company (quota purchase agreement).

Notwithstanding anything to the contrary in this Agreement or under applicable Law, the Sellers’ obligations to indemnify under this Article X shall be subject to the following restrictions and limitations:

  • Survival. In no event shall the Sellers be responsible to the Purchaser for any obligation arising out of Sections 10.2 (a) and 10.2 (b) in respect to which a Third Party Claim is not underway as of the Closing Date or an Indemnification Notice is delivered later than:
    1. the whole statutory period set forth in applicable Law, with respect to the Warranties granted under Sections 8.1.11 (Organization and Powers), 8.1.2 (Subsidiaries), 8.1.3 (Capital Stock and Ownership of Sold Quotas), 8.1.4 (No Violation), 8.1.5 (Authorizations) and 8.1.6 (No Litigation or Other Obligations on Quotas) of Exhibit 8.1;
    2. six (6) years from the Closing Date, with respect to the Warranties granted under Sections 8.1.11 (Tax Issues; Tax Benefits) and 8.1.18 (Safety, Health and Environmental Laws) of Exhibit 8.1;
    3. three (3) years as from the Closing Date, with respect to the Warranties granted under Section 8.1.16 (Civil and Criminal Litigation) of Exhibit 8.1; and
    4. two (2) years as from the Closing Date, with respect to the warranties not referred to in the foregoing items.
  • De minimis. Except for any obligation arising out of Sections 10.2(c), 10.2(d) and 10.2(e), the Sellers shall have no obligation to indemnify the Purchaser under the present Agreement for those Losses that, on a unitary basis, do not exceed fifteen thousand Reais (R$ 15,000.00). In other words, no Loss involving an individual amount equal to or less that such threshold shall be indemnifiable by the Sellers under this Agreement, other than those referred to in Sections 10.2(c), 10.2(d) and 10.2(e);

 (Seller’s liability not excluded in case of fraud, bad faith or gross negligence)

Neither A, its employees, nor any affiliated company of A or its employees, will be responsible for losses or damages that may be incurred by B or any third party by reason of any action or omission by B, its employees or any third party even though said action or omission was based on technical information or advice furnished by A, its employees, any of its affiliated companies or its employees, in accordance with this Agreement, except if such damages or losses were caused by fraud, bad faith or gross negligence on the part of A or its employees.

(Seller’s liability for environmental contingencies excluded)

Y shall not be liable for any corrective action required by third parties or for any fines or damages resulting from a situation or procedure which was identified as problematic in the conclusions of the environmental audit, and for which no corrective action has been required by Y.

(Seller’s liability excluded by virtue of limiting the scope of its obligation)

The technical assistance and the services which A undertakes to perform for B in accordance with this Agreement will be of an advisory nature only, and due to this all of the responsibility for the utilization of the technical recommendations provided by A, its employees, its affiliates or their employees in accordance with this Agreement, shall rest solely with B.

(Seller’s liability for timely delivery excluded)

Delivery dates are The technical assistance and the services which A undertakes to perform for B in accordance with this Agreement will be of an advisory nature only, and due to this all of the responsibility for the utilization of the technical recommendations provided by A, its employees, its affiliates or their employees in accordance with this Agreement, shall rest solely with B.

Modification of time-limits

The Buyer agrees that any claim or lawsuit relating to the purchased goods must be filed no more than six (6) months after the delivery date. The Buyer hereby waives any statute of limitations to the contrary.