Exclusion or limitation clauses in contracts must be clearly drafted

In brief - Cost of interruption to power supply held to be a direct loss, not a consequential loss

The Supreme Court of WA has found that expenses incurred by an electricity supplier in generating replacement power to supply its customers, following a two month outage at a power station, amounted to a direct loss which was not excluded under the terms of the contract as a consequential loss.

What constitutes "indirect" or "consequential" loss or damage?

It is not uncommon for parties to more sophisticated commercial contracts to agree to limit or exclude claims against each other for certain types of loss or damage. In such contracts, claims for "indirect" or "consequential" losses or damage are frequently sought to be excluded. The meaning of "indirect" or "consequential" loss or damage, however, continues to be a topic of much debate.