Exclusion of Liability for “Consequential Loss”

Christopher Parr, Director, Courtney Consultancy Ltd, Switzerland

One of the first things that most lawyers learn when they enter the real world of commercial transactions is that liability for “consequential losses” is to be excluded under all contracts that they negotiate. In 30+ years of in-house practice, I have never known a company to have an “open” policy on this point. But what are these “consequential losses”; why are they so roundly feared by the business community; and, how can we build exclusion clauses that work?

Christopher Parr is a Solicitor qualified in England and Wales. He has more than 30 years of practice experience, including as a Regional General Counsel (EMEAA) and Vice President, Legal Affairs (EMEAA). His employers have included Conoco, Air Products, Monsanto, Harsco and ON Semiconductor. Chris is now a self-employed consultant working from bases in Switzerland and London. His specialities are commercial contracts, commercial risk management, joint ventures and commercial dispute mediation.

Courtney Consultancy Ltd is a private company through which my wife and I run our respective commercial advisory practices.