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transnational law transnational law (lex mercatoria or international business law) and "Limits to claims for damages" 2016-03-01 13:58:16

No. VII.3.1 - Limits to claims for damages

Damages may not exceed the actual loss and are available only for loss which is proven by the aggrieved party, or where the amount of damages cannot be established with a sufficient degree of certainty, assessed by the court or tribunal.

1 The Principle sets limits to the Principle of full compensation. Such compensation is always limited to the loss suffered by the aggrieved party. Such loss may include future damages such as lost profits or further damages such as lost business chances, provided that such loss can be established with a sufficient degree of certainty. However, there are no punitive damages in transnational law and the aggrieved party may not be enriched through the damages which it claims from the party in breach. 

2 Immaterial of the nature of the damage, any damage claim is subject to the general rules of burden of proof. This means that the aggrieved party must always prove the damages which it claims.

3 In special cases in which that party finds it impossible to quantify its damages, those damages may be quantified by the court or arbitral tribunal which enjoy a certain degree of discretion.

Please cite as: "Commentary to Trans-Lex Principle , "
International Legislation
Model Laws
National Legislation
Contract Clauses
1. Limited Liability for Damages
Sales & Purchase Contract
Limitation on Liability

Except as otherwise specifically provided herein, in no event will either party be liable under this contract, whether in contract, in tort (including negligence and strict liability) or otherwise, for incidental, consequential, special or punitive damages.


(...) In no event shall X be liable for Y's cost of processing, lost profits, injury to good will or any other special or consequential damages.

Claims against the Sellers

Any claims vis-à-vis any of the Sellers under or in connection with this Agreement are excluded, if and to the extent that the amount of such claims does not exceeed EUR {X} in the individual case and, taking into account only such claims which exceed the aforementioned threshold, EUR {Y} in the aggregate.

Seller's Default

In the event that Buyer is not in default of Buyer's representations, warranties and covenants under this Agreement and is ready, willing and able to take title to the Property in accordance with this Agreement, and Seller fails to consummate this Agreement and convey title as set forth herein, Buyer shall have an action for specific performance of Seller's obligations to execute the documents required to convey the Property to Buyer, it being understood that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder; alternatively, Buyer may elect to terminate this Agreement and recover the Deposit. In either such case, Buyer shall have no right to an action for damages against Seller other than for the return of the Deposit. Buyer shall be deemed to have elected to terminate this Agreement and receive back the Deposit if Buyer fails to file suit for specific performance against Seller in a court having jurisdiction in the county and state in which the Property is located, on or before sixty (60) following the date upon which Closing was to have occurred.

Representations and Agreements of the Issuer

Notwithstanding the foregoing, the liability of the Issuer under any such representations and agreements for any breach or default by the Issuer thereof or thereunder shall be limited solely to the rents, revenues and receipts derived by it from the Lease Agreement and pledged to the payment of the Bonds.

Limitation of Liability

In no event shall either party be liable for loss of profits or indirect, special, exemplary or punitive, or consequential damages.

Limitations on Indemnification Obligations

(...) In no event shall any party have any liability (...) for any consequential, special, incidental, indirect or punitive damages, lost revenue, profits or income, diminution in value, loss of business reputation or opportunity or similar costs unless awarded to a third party in a Third Party Claim (...)

General Agreement to Indemnify

Notwithstanding anything contained in this Agreement to the contrary, no party shall be liable to the other party for indirect, special, punitive, exemplary or consequential loss or damage arising out of this Agreement (...)

Indemnity of Seller

(...) Notwithstanding the foregoing provisions of this section, no claim for indemnification shall be made by Seller under this section unless and until the aggregate amount of all Losses of Seller in respect thereof shall exceed $15,000, but then such indemnified parties shall be entitled to all indemnifiable Losses above and below such threshold.


This Clause X sets forth the sole and exclusive remedy of the Buyer for delays in delivery or failure to deliver, other than such delays as are covered by Clause X, and the Buyer hereby waives all rights to which it would otherwise be entitled in respect thereof, including without limitation any rights to incidental and consequential damages or specific performance. The Buyer will not be entitled to claim the remedies and receive the benefits provided in this Clause X where the delay referred to in this Clause X is caused by the negligence or fault of the Buyer or its representatives.

Nature of Appointment; Limitation of Duty

(...) Notwithstanding anything contained herein, neither the agent nor any of its affiliates, nor any of its or its affiliates' respective officers, directors, employees, agents or representatives shall have any duty to exercise any right or power granted hereunder or otherwise or to preserve the same and shall not be liable for any failure to do so or for any deal in doing so, except in respect of damages attributable solely to its own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction; provided that in no event shall they be liable for any punitive, exemplary, indirect or consequential damages.

Limits on Indemnification

No indemnity claim under this Article X is payable until it has been established in a final non-appealable order, judgment or adjudication established pursuant to the dispute resolution mechanism set forth in Section X. The amount of any payment by the Indemnifying Party to the Indemnified Parties under this Article X in respect of Losses resulting from or arising out of any indemnification or contribution claim made pursuant to Section X shall in no event exceed 20% of the aggregate purchase price paid to the Company by the Purchaser in consideration of the Purchased Shares. The Indemnifying Party shall not be liable for any claim for any indemnification under this Article X unless and until the amount that would be recoverable from the Indemnifying Party in respect of that claim, when aggregated with any other amount or amounts recoverable in respect of other Claims, exceeds US$1,000,000, in which case the Indemnified Party shall be entitled to claim for the total amount that is recoverable from all Claims and not just the excess above US$1,000,000 (the "Basket"), provided no amount of an individual Claim is recoverable or may count toward the Basket if such individual Claim does not exceed US$500,000.

Services Contract
Limitation of Remedy

With respect to any non-conforming goods, Distributor shall notify Company in writing of the non-conformity promptly after obtaining knowledge of its existence. Distributor's sole and entire remedy with respect to such non-conformity shall be replacement of Products, or refund of the purchaser price, at the Company's option. In no event shall Company be liable for any incidental or consequential losses or damages (including but not limited to economic loss or loss of profits) suffered or incurred by distributor as a result of or in connection with any breach of this agreement by Company or in connection with any tort (including but not limited to strict liability or negligence) whether allegedly committed by Company in connection with this agreement or alleged by any person to have resulted from the usage of any licensed product - (International Contracting: Law and Practice - Larry A. DiMatteo - §9.02 - S. 322).

Limitation of remedies

Seller's entire liability and User's exclusive remedy shall be repair and replacement including materials and labor for a period of one year unless the product has been abused, misused, or modified. In no event will seller be liable to the user for any damages, including any lost profits, incidental or consequential damages arising out of the use or inability to use the product (..) - (International Contracting: Law and Practice - Larry A. DiMatteo - §10.18 - S. 362).


In no event will either party be liable for any indirect, consequential, incidental, special or punitive damages, including without limitation loss of use, interruption of business, loss of data or loss of profits, arising out of or in any way connected with this agreement, even if the liable party has been advised of the possibility of such damages, except for liability arising out of unauthoriwed use of confidential information or intellectual property.

Consequential Damages

Except for breaches of confidentiality obligations, in no event will either X or Y be liable for, nor shall the measure of damages include, any damages for lost profits, lost income or lost revenue, or for any indirect, incidental, special, or consequential damages, arising out of or relating to its performance or failure to perform under this Agreement, whether based on an action or claim in contract, equity, negligence or otherwise, and even if advised of the possibility of such damages.

Limitation of Liability

In no event shall either Party be liable to the other for any lost profits, or for any indirect, special or consequential damages, even if such Party has been advised of the possibility thereof. Each party acknowledges that the foregoing limitations are an essential element of the Agreement between the Parties and that in the absence of such limitations the terms set forth in this Agreement would be substantially different.

The Collateral Agent´s Duties

(...) The Collateral Agent shall not be liable for any action taken or omitted or for any loss or injury resulting from its actions or its performance or lack of performance of its duties hereunder in the absence of gross negligence or willful misconduct on its part. In no event shall the Collateral Agent be liable (i) for acting in accordance with or relying upon any instruction, notice, demand, certificate or document from Pledgor or any Authorized Person of the Pledgor contemplated by this Agreement, and from any registrar or transfer agent for the Mandatory Convertible Preferred Stock, provided that such instruction, notice, demand, certificate or document complies in all material respects with the provisions hereof, (ii) for any indirect, consequential, punitive or special damages, regardless of the form of action and whether or not any such damages were foreseeable or contemplated (...) (v) for an amount in excess of the value of the Collateral, valued as of the date of deposit, but only to the extent of direct money damages.

Limitation of Damages

X shall have no liability for any indirect, incidental, special or consequential damages or any loss of revenue or profits arising under or with respect to this Agreement (...) regardless of whether X has been advised of the possibility of such damages (...) X's aggregate liability (...) shall in no event exceed the total Commissions paid or payable by X to Y under this Agreement.

Indemnification: Limitation of Liability

(...) neither X nor Y shall be liable to one another for any special, consequential (...), incidental, punitive or indirect damages, losses, costs or expenses of any kind arising out of this Agreement ot its termination, however caused, and whether based in contract, tort (including negligence), products liability or any other theory of liability regardless of whether such party has been advised of such the possibility of such damages, losses, costs or expenses (...)

Limitation of Liability

In no event shall the Collateral Agent be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

Construction & O&M Contract

Die Haftung für Personenschäden, gleich aus welchem Rechtsgrund, richtet sich nach den gesetzlichen Bestimmungen. Das Konsortium haftet der von ihr zu vertretende Sachschäden bis zu {X} Mio. je Schadensereignis (Deckung durch die abgeschlossene Haftpflichtversicherung). Weitergehende Schadenersatzansprüche für Sachfolgeschäden und Vermögensschäden sind generell ausgeschlossen. Obige Haftungsbechränkungen gelten nicht beim Vorsatz und grob fahrlässigem Handeln der Organe und leitenten Angestellten des Konsortiums.

Limited Liability

The party who (...) is liable for a damage shall only be liable for loss of production, loss of profit or other consequential economic loss caused by the damage, to the extent that such loss is covered by insurance which that party is obliged to take out according to the Contract.

Limitation of Liability

The remedies for breach of contract which are specified in these conditions shall be the sole remedies available. Neither party shall, except as specified in the Contract, be liable for or obliged to indemnify the other party for any direct or indirect loss or damage such as, but not limited to, loss of profit, loss of use or production, and loss of contracts. This limitation of liability shall not apply, however, where such loss or damage has been caused by intent or Gross Negligence.

Loan Contract
Limitation of Liability

In no event will the purchaser have any liability arising hereunder or in connection herewith to any party or other person for any lost profits or other consequential, special, incidental, indirect, collateral or punitive damages of any kind, regardless of whether such party or person will be advised, will have other reason to know, or in fact will know of the possibility of the foregoing.

Damage Waiver

(...) To the extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

Asset Transfer Agreement
Liabilities for Breach

Where any party commits a breach of this Agreement, it shall be liable to compensate the other parties for any and all damages caused as a result of the breach, not including, however, indirect or consequential damages (...)

Asset Management Agreement

Notwithstanding other provisions of the Agreement, the Indemnified Parties shall not be responsible for any Losses incurred by Party A or any third party as result of the acts or failures to act or any errors of judgment in performing their obligations under the Agreement, unless the losses are caused by the fault of Party B.

Joint Venture
Remedies Upon Default

In no event shall any Member have the right to, nor shall any Member be obligated or liable for, consequential, special or punitive damages, and in no event may the total damages recovered under any circumstances exceed the amount of Capital Contributions paid or payable by a Member

Consequential Damages

No Party shall be liable to any other Party under any legal theory for indirect, special, incidental, consequential or punitive damages, or any damages for loss of profits, revenue or business, even if such party has been advised of the possibility of such damages.

Mortgage Financing Contract
Waiver of Damages

Except as to claims arising out of the negligence or willful misconduct of the Mortgagee, the Mortgagor further waives any claim against the Mortgagee for consequential, special or punitive damages arising in connection with the Indenture, this Mortgage or any of the other documents securing the Securities, and further waives the right to interpose any defense based on any statute of limitations or any claim of laches arising in connection with the Indenture or this Mortgage and any setoff or counterclaim of any nature or description.

Economic Development Agreement
Waiver of Consequential Damages

X waives all present and future claims for consequential damages against Y and the appointed or elected officials, members, agents, employees, officers, directors and representatives of Y arising from or related to this Agreement, and such waiver shall survive any termination of this Agreement. 

A project of CENTRAL, University of Cologne.