Also known as: exclusive remedy · limited remedy · limitation of remedies · exclusive remedies clause
Written by attorneys · grounded in primary & secondary sources — see below
A contractual stipulation that confines a party's available remedies to specified forms, such as repair or replacement of goods. When circumstances cause the stipulated remedy to fail of its essential purpose, the aggrieved party may pursue remedies otherwise available under the governing law.
Select any source to read its text and confirm it supports the definition.
Eastern Electric sold hybrid seeds to Eric Espinoza under a contract that limited his remedy to replacement seed only. The delivered seeds failed to germinate due to a latent defect, producing total crop loss far exceeding the contract price. Because replacement could not restore the lost harvest, Eric may pursue damages under the UCC.
Eileen Epstein signed an employment agreement requiring arbitration of all claims and limiting her exclusive remedies to back wages only. After termination she sought statutory remedies including punitive damages and reinstatement. Because the wage cap prevented full vindication of statutory rights under the contract, the limitation was unenforceable.
Ethan Evans sought to use his property in a manner barred by a municipal housing code. He bypassed the local administrative tribunal and filed directly in federal court. Because the code supplied an exclusive contractual administrative remedy that had not been pursued, his federal action was premature.
A limited remedy fails when the stipulated relief cannot achieve its basic objective, such as when repeated repair attempts leave goods unusable. In that event the buyer regains access to all UCC remedies including damages.
Supporting sources
…administrative processes is mandated for a complex of reasons. Statutes sometimes provide administrative procedures as the exclusive remedy. Even apart from a statutory command, it is common sense to permit the simple, speedy, and inexpensive processes of the administrative machinery to sift the facts and compile a complete…