Exclusion clause Definition | Legal Glossary | LexisNexis (2024)

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A contractually agreed limit on liability for non-performance of an agreement and a defence to the extent permitted by law.

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Exclusion and limitation of liability

This Practice Note considers exclusion and limitation of liability in business-to-business (B2B) contracts. It provides guidance on the common law and statutory controls affecting exclusion and limitation of liability clauses (also known as limitation of liability clauses, limitation clauses, exclusion of liability clauses, exclusion clauses and exemption clauses), including the provisions of the Unfair Contract Terms Act 1977 (UCTA 1977) and the Misrepresentation Act 1967 (MA 1967).It looks at what types of clauses constitute exemption clauses and the three key issues to consider when drafting such clauses or analysing them in a dispute:•incorporation•construction, and•statutory controlsIt also considers the court’s approach to the exclusion or limitation of liability for certain types of breach (eg fundamental breach) and types of loss (eg direct loss, indirect and consequential loss, loss of profits, loss of use and loss of data), some of the common ways in which parties exclude or limit liability (eg financial caps, time bars, excluding rights of set-off) and exemption clauses and third parties.For an overview of each section in this...

Key terms and conditions in commercial contracts

This Practice Note considers the key terms and conditions found in business-to-business (B2B) commercial contracts. It sets out the general drafting considerations and considers the key operative provisions, such as term, primary obligations, warranties, price and payment, confidentiality, intellectual property rights, data protection, liability and limitation of liability, indemnities, termination and consequences of termination.Initial considerationsStructure and formThe initial consideration for any contract must be what form it will take, and that decision will largely be informed by what the contract is seeking to achieve and in what environment it is expected to be entered into. For example, simple contracts are capable of being entered into orally, in writing or by conduct; whereas some agreements require greater formality and must be executed as a deed. Those simple contracts which are in written format, may be drawn-up as formal or bespoke agreements (which generally anticipate some degree of negotiation and the signature of the parties entering into it) or as standard form terms and conditions. Standard terms and conditions may form a...

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Ireland—Sales and marketing agency agreement for services—exclusive—pro-principal

This Precedent is an agency agreement for use where the principal supplies services and authorises an agent to market and procure orders on behalf of the principal (subject to the principal’s acceptance), also referred to as a sales agency agreement or a sales and marketing agency agreement. An option is also provided where the agent will enter into sales and supply contracts on the principal’s behalf (where authorised). This is primarily a pro-principal Precedent, but drafting options for agents are also provided. In this Precedent, the principal appoints the agent as its exclusive agent, which means that the principal gives the agent exclusive rights over the sale of the services in a particular geographic territory, market sector or group of customers. An exclusive agency appointment means that the principal is restricted from appointing another agent to sell the services in the territory and the principal cannot sell services directly in the agreed territory, subject to applicable competition laws. The agreement is prepared on the basis that the Commercial Agents Regulations...

Witness statement in support of an application to challenge English court jurisdiction

Witness statement in support of an application to challenge English court jurisdiction Filed on behalf of the defendant Witness Statement of [insert initial and surname of witness ] Number of witness statement: [insert number of witness statement in relation to the witness] Exhibit details: [insert initials and number of each exhibit referred to] Date on which statement was made: [insert date] [Date of translation: [insert date]] Claim No. [insert claim number]. [IN THE HIGH COURT OF JUSTICE [BUSINESS AND PROPERTY COURTS [OF ENGLAND AND WALES OR IN [insert location] OR [Specify division] [Specify specialist court] [Insert location] DISTRICT REGISTRY THE COUNTY COURT AT [insert location] [BUSINESS AND PROPERTY COURTS LIST Between [Party A]Claimant/Respondent and [Party B]Defendant/Applicant ________________________________________________________________________________ [NUMBER OF WITNESS STATEMENT EG FIRST] Witness Statement of [insert name of witness] on behalf of the defendant ________________________________________________________________________________ I [name] of [Law firm name and address] state as follows: 1 I am a solicitor of the Senior Courts of England and Wales and [an...

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Do/can you use a ‘Rights of Third Parties’ clause in trust documents, eg a deed of appointment appointing trust assets to a beneficiary, and if so is it likely to be enforceable, or are these clauses only used in contracts/commercial transactions?

Do/can you use a ‘Rights of Third Parties’ clause in trust documents, eg a deed of appointment appointing trust assets to a beneficiary, and if so is it likely to be enforceable, or are these clauses only used in contracts/commercial transactions? The applicability of ‘Rights of Third Parties’ clauses to trust documents The issue in this Q&A is whether a ‘Rights of Third Parties’ clause can be used in trust documents, such as a deed of appointment appointing trust assets to a beneficiary. If so, is it likely to be enforceable, or are such clauses only used in contracts/commercial transactions. ‘Rights of third parties’ clauses The Q&A refers to the standard clause inserted in contracts since the enactment of the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999). The clause is generally to the following effect: ‘Contractual rights of third parties No person who is not a party to this agreement shall have any right under the Contracts (Rights of Third Parties) Act 1999 to...

Can a law firm be liable to its client in a transaction where a loss is sustained through currency fluctuation?

Can a law firm be liable to its client in a transaction where a loss is sustained through currency fluctuation? This Q&A answers the following questions: • can a firm be liable to its client in a transaction where a loss is sustained through currency fluctuation arising from the firm’s delay? • what is the firm’s potential liability in: ◦ negligence, or ◦ breach of contract (under any relevant implied terms) • what if the loss arises out of a delay for which the firm is not responsible, eg delay on the part of the client or other party? • what if there is no delay to the transaction, but there is a currency fluctuation causing loss during the expected/normal transaction duration period? • can a firm limit its liability for claims arising out of the above scenarios eg through a clause in its Terms of Business? Practitioners encounter this kind of uncertainty and risk on a fairly regular basis, eg the Greek government debt crisis...

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Chubb relies on war exclusion in US$180m Russian planes suit

Law360: Chubb has denied claims that it owes several Irish lessors for two jets insured for over US$180m stranded in Russia, saying the aircraft are not physically lost and would be excluded as a war risk from the reinsurance policy.

Reinsurers escape US$41m claim over Taliban warehouse loss (Hamilton Corporate Member Ltd and others v Afghan Global Insurance Ltd and others)

Law360, London: A logistics company that lost its warehouse to the Taliban cannot claim US$41m from reinsurers because under the 'clear wording' of its policy it was not covered for loss caused by seizure, a London court ruled on 12 June 2024.

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