What is the Limitation of Liability paragraph and why do the lawyers argue so much about it?
A. When you think about it, the potential for incidental and consequential damages exists in any number of ways if the Supplier breaches the Contract. Poor quality, late delivery, failure to perform or deliver, and field failures are just some examples of things that can go wrong and cause the Buyer additional money, time, expenses, lost business….the list goes on. If the Supplier breaches the Contract and causes harm (damages) to the Buyer, the Supplier will be liable (responsible) to reimburse the Buyer. The exception to his is if the Supplier includes a Limitation of Liabilities clause in the Contract. An example of this clause is: In no event shall Supplier be liable to Buyer for any incidental or consequential damages. Supplier’s maximum liability under this Contract shall be limited to the purchase price of the Product. Limiting liabilities for damages is a means of reducing a Supplier’s exposure for having to pay large sums of money. Most Suppliers try to exclude incidental and
