Exclusion and Limitations of Liability

Abstract

This chapter outlines several types of clauses in construction contracts and contracts with professionals in which the contractor or the professional seeks to exclude or limit its liability for breach of contract and negligence. It includes clauses that exclude liability for defective performance and damages. It also considers clauses that appear in standard forms, such as the current edition of the FIDIC forms and the contracts issued by the Institution of Civil Engineers and the Institution of Mechanical Engineers. This chapter discusses the relative rarity of clauses that exclude all liability for defective performance but which can be common in high-value contracts when they are allied with clauses that require the contractor to repair and replace defective work. It looks at contractors that have the obligation to remedy defects, which can be limited to liquidated damages in respect of delay are not limited to cases where the cause if failure to remedy defects. It also considers the position of consumers who are subject to such clauses.