Consequential damages refer to losses that do not flow directly and immediately from an act but rather result indirectly from the act's harmful consequences, such as lost profits or business opportunities. These damages are often excluded in contracts to limit a party's liability for these indirect, and sometimes unforeseeable, damages stemming from breaches or other issues.
8.No Warranties; Consequential Damages Excluded. a.Disclaimer of Warranties. LESSOR HAS NOT MADE AND DOES NOT MAKE ANY WARRANTY OR REPRESENTATION WHATSOEVER, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, CONDITION, MERCHANTABILITY, DESIGN OR OPERATION OF THE ADU(S), THEIR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OR CAPACITY OF THE MATERIALS IN THE EQUIPMENT OR WORKMANSHIP IN THE ADU(S), LESSOR'S TITLE TO THE ADU(S), NOR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER; Lessor shall not be liable to Lessee for any loss, damage, or expense of any kind or nature caused, directly or indirectly, by the ADU(s) or the use or maintenance thereof or the failure or operation thereof, or the repair, service or adjustment thereof, or by any delay or failure to provide any such maintenance, repairs, service or adjustment, or by any interruption of service or loss of use thereof or for any loss of business howsoever caused. b.Exclusion of Consequential Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, LESSOR SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO LESSEE OR ANY THIRD PARTY, FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THE TRANSACTION CONTEMPLATED HEREUNDER, WHETHER IN AN ACTION BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY OTHER LEGAL THEORY, INCLUDING, BUT NOT LIMITED TO, LOSS OF ANTICIPATED PROFITS, OR BENEFITS OF USE OR LOSS OF BUSINESS, REGARDLESS OF WHETHER SUCH LOSSES ARE CONSTRUED TO BE CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES, AND EVEN IF LESSOR IS APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION OF DAMAGES, IS INTENDED BY THE PARTIES TO BE SEVERABLE FROM ANY OTHER PROVISION AND IS A SEPARABLE AND INDEPENDENT ELEMENT OF RISK ALLOCATION AND IS INTENDED TO BE ENFORCED AS SUCH. THE PARTIES ALSO AGREE THAT, REGARDLESS OF THE FAILURE OF ANY SOLE OR EXCLUSIVE REMEDY APPLICABLE TO THE EQUIPMENT, LESSEE WILL NOT BE ENTITLED TO ANY CONSEQUENTIAL DAMAGES OF WHATSOEVER KIND OR NATURE. THE PARTIES INTEND THE EXCLUSION OF CONSEQUENTIAL DAMAGES AS AN INDEPENDENT AGREEMENT APART FROM ANY SOLE AND EXCLUSIVE REMEDY APPLICABLE TO THE EQUIPMENT.
(b)Consequential Damages. IN NO EVENT WHATSOEVER SHALL ANY PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES, SO FAR AS PERMISSIBLE BY LAW, FOR SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS MOU OR ANY WORK PERFORMED IN CONNECTION HEREWITH OR FOR ANY LOSS OF PROFITS OR REVENUE, LOSS OF PRODUCTION OR PRODUCTION OPPORTUNITIES, ENVIRONMENTAL DAMAGES, LOSS OF GOODWILL, LOSS OF CAPITAL COSTS, (1) REGARDLESS OF WHETHER OR NOT THE DAMAGES WERE FORESEEABLE, (2) REGARDLESS OF THE THEORY OR CAUSE OF ACTION UPON WHICH THE DAMAGES MIGHT BE BASED, AND (3) NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN; EXCEPT WHERE SUCH SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISE FROM ANY CLAIMS (A) RESULTING FROM GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ATTRIBUTABLE TO A PARTY OR ITS AFFILIATES OR (B) ARISING FROM LIABILITY TO A THIRD PARTY.
10.9. Performance Consequential Damages. If Supplier has not achieved the performance deliverable pursuant to Exhibit A, Section 4.1(c) - Production Ramp (First Customer Shipments “FCS”) – Week of June 5, 2023, or earlier as agreed to by Company and the Supplier, the Supplier shall be notified as identified in Supplier Agreement, Section 10.9. Upon receipt of written notice of default, the Supplier will have ten (10) calendar days to provide a written explanation of any justification that may be applicable to the Consequential damages being considered and a corrective action plan for bringing the operations within the standards specified. Company will have the right to approve and make changes to the corrective action plan submitted by Supplier. The corrective action plan must be implemented by Supplier at no cost to and upon approval by Company. Consequential damages will not be assessed during the specified cure period for the activity in question. Supplier’s failure to achieve the approved corrective action plan may be deemed by Company as a breach of this Agreement. If otherwise a corrective action plan is not provided by Supplier, Consequential damages shall be assessed at up to [***] per calendar day. Consequential damages shall be deducted from future payments to Supplier until remedied. If the company makes changes to the product or the schedule that disrupts continuous production and causes production delays, Consequential damages shall be assessed at up to [***] per calendar day.
5. Holding Over. Licensee understands and agrees that a new licensee(s) will utilize the Licensed Premises on or after the Termination Date. If Licensee fails to comply with the terms hereof, or fails to fully remove itself and all of its personal property from the Licensed Premises as of the Surrender Date, Licensee may be liable for any consequential damages that arise directly therefrom, including but not limited to those arising out of such new licensee terminating its agreement with Licensor, if and only if Licensee’s possession continues for ten (10) days after written notice from Licensor, which notice shall state that Licensee shall be liable for consequential damages if Licensee remains in possession of the Licensed Premises after such ten (10) day period.
7. NO CONSEQUENTIAL DAMAGES 7.1. NEITHER THE MANAGER NOR ANY OF ITS AFFILIATES SHALL BE LIABLE FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE COMPANY, OR FOR PUNITIVE DAMAGES, WITH RESPECT TO ANY TERM OR THE SUBJECT MATTER OF THIS AGREEMENT, EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION, INCLUDING, WITHOUT LIMITATINO, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, FRAUD, MISREPRESENTATION.
21.Consequential Damages. Notwithstanding any provision of this Sublease to the contrary, in no event shall Sublandlord or Subtenant be liable hereunder or under the Master Lease for any consequential, special or indirect damages or damages in the nature of lost profits; provided, however, that this waiver of consequential damages shall not apply with respect to liabilities of Subtenant relating to either (a) a holdover by Subtenant, or (b) any violation of environmental requirements of the Sublease or the Master Lease, or any environmental liabilities or violations of environmental laws for which Subtenant is otherwise liable.
5.5 In no event shall either party be liable under any legal theory for any indirect, special, incidental and/or consequential damages. Damages such as but not limited to loss of profits, loss of revenue, loss of savings, loss of goodwill and/or loss of data shall be deemed as indirect and/or consequential damages and shall not give rise to any liability of a party hereunder nor to payment of any compensation by a partyWisekey, even if the party has been advised of the possibility of such damages. Under no circumstances shall Wisekey’s liability hereunder exceed an amount equal the net amount of the Order of Products or services which gave rise to the liability.
8. Consequential Damages. IN NO EVENT WILL ANY PARTY TO THIS AGREEMENT BE LIABLE OR RESPONSIBLE TO ANY OTHER PARTY HERETO FOR ANY TYPE OF INCIDENTAL, PUNITIVE, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST REVENUE; OR LOST PROFITS, ARISING FROM OR RELATING TO THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER ARISING UNDER ANY THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE.
12.3 Consequential Damages. No party to this Agreement shall be liable to the other party for special, indirect or consequential damages under any provision of this Agreement or for any special, indirect or consequential damages arising out of any act or failure to act hereunder.
E. WAIVER AND LIMITATION OF LIABILITY. a. EXCEPT WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS SET OUT IN SECTION 6(A) OR 6(B) AND EXCEPT TO THE EXTENT SET OUT IN SECTION 6(E)(c), NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS, REVENUES OR OTHER ECONOMIC LOSSES (“CONSEQUENTIAL DAMAGES”), REGARDLESS OF CAUSE, OR COMBINATION OF CAUSES. b. Except with respect to the indemnification obligations set out in Section 6(A) or 6(B) and except to the extent set out in Section 6(E)(c), the maximum aggregate liability of each of Service Provider and Company, as applicable, shall not exceed the aggregate fees payable by Company to Service Provider under this Agreement during the twelve months immediately prior to the most recent claim hereunder. c. The limitation on Consequential Damages, and the limitation on a party’s aggregate liability, shall not apply to: (i) damages caused by a Party’s breach of Section 7 (Confidentiality); (ii) amounts payable by a Party pursuant to its indemnification obligations in this Section 6; (iii) Company’s obligation to pay Service Provider fees and reimburse Service Provider costs as set out in this Agreement or any SOW; (iv) losses arising from the liable party’s gross negligence, willful misconduct, or fraud; (v) personal or bodily injury, including death or disease, caused by the liable party’s negligence; (vi) loss or damage to property caused by the liable party’s negligence; (vii) the liable party’s violation of applicable law; and (viii) the liable party’s infringement or misappropriation of intellectual property rights.
13. Waiver of Consequential Damages. The Client and SG ECHO waive consequential damages for claims, disputes or other matters in question arising out of or relating to this Agreement or any Purchase Order or otherwise. This mutual waiver is applicable, without limitation, to all consequential damages due to either party’s termination of this Agreement, or any Purchase Order, except as specifically provided in Section 17 below.
Consequential damages, also known as “special damages,” refer to the losses that result not directly from an act but from the specific circumstances of the affected party. These damages go beyond the immediate scope of the contract breach and include any indirect losses incurred as a consequence of the breach. Common examples include lost profits, future earnings, and additional operational costs.
You should consider consequential damages in scenarios where the breach of contract has caused significant indirect losses. This is particularly relevant when:
When drafting a clause for consequential damages in a contract, clarity, and specificity are key. The clause should:
Example clause:
“The Seller shall not be liable for any consequential damages, including but not limited to lost profits, loss of business, or reputational harm, arising from the delay or non-delivery of goods.”
Consequential damages clauses are commonly found in:
These clauses help manage the allocation of risk and ensure that parties are aware of the potential for significant indirect losses.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
A cooperation clause requires that all parties involved in a contract work together collaboratively and provide necessary support to each other to fulfill the terms and conditions of the agreement. This may include sharing information, resources, and assistance to ensure the successful completion of contractual obligations.
A Disclaimer of Damages clause limits or eliminates a party's liability for certain types of losses, such as consequential, incidental, or punitive damages, that may arise from a breach of contract or other incidents. This clause is designed to reduce potential financial exposure and can significantly impact the scope of recoverable damages in a legal dispute.
The due diligence period in a contract is a designated timeframe during which the buyer is allowed to thoroughly inspect and evaluate the property or assets involved in the transaction. This period aims to ensure the buyer can identify any potential issues and make informed decisions before finalizing the agreement.
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