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ARTICLE · 18 OCTOBER 2011

Damages Waiver Clauses Often Problematic

Waivers of consequential damages in contractual agreements have become commonplace, yet these clauses often result in significant unintended consequences.

United StatesCorporate/Commercial Law
Arthur House
Arthur House

Waivers of consequential damages in contractual agreements have become commonplace, yet these clauses often result in significant unintended consequences. Here is an example of a simple consequential damages waiver clause, the kind frequently found in the "miscellaneous" section of contracts:

Notwithstanding anything to the contrary contained in this Agreement, no party to this Agreement shall be liable for any consequential, special, indirect, incidental, exemplary or punitive damages of any kind or nature whatsoever, or any lost income or profits, regardless of whether arising from breach of contract or tort, even if advised of the possibility of such loss or damage or if such loss or damage could have been reasonably foreseen.

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