Limitations of liability: Waivers of Consequential Damages
Waivers of consequential damages have become the industry standard in construction projects, and these clauses are found in most industry templates, writes Gregory Faulkner in Robinson+Cole’s blog, Construction Law Zone.
“No contractor wants to accept the risk that any one breach could lead to the financial ruin of its company,” he writes. “But does this clause, and others like it, go too far in the other direction?”
“Neither party should rely blindly on standard industry forms to define what losses are recoverable in the event of breach. A project owner should analyze its potential exposures as part of its overall business plan for the project,” Faulkner writes.