Also known as: limitations of remedy · limit of remedies · limiting remedy · limitation on remedies · remedy limitation · limitations on remedies
Written by attorneys · grounded in primary & secondary sources — see below
A contractual provision that restricts the remedies available to a party upon breach. Such a clause may limit recovery to repair or replacement of goods or exclude consequential damages. The provision is subject to unconscionability review and does not apply when goods or tender fail to conform unless the parties have otherwise agreed.
Ridge Crop delivered defective corn seeds to White Rural under a confirmation that restricted the buyer to replacement seed only and barred recovery of lost crop profits. The seeds failed to germinate, causing over one million dollars in claimed losses. White Rural sued for the full amount of lost profits despite the clause in the confirmation.
A consumer purchased tires from a retailer under a written guarantee that limited remedies to repair or replacement and excluded consequential damages for personal injury. The tires failed and caused an accident resulting in bodily harm. The buyer sued for personal injury damages beyond the stated repair or replacement remedy.
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A limitation of remedy added in an acceptance or confirmation becomes part of the contract between merchants unless it materially alters the deal. Material alteration occurs when the clause causes surprise or hardship by shifting risks in a way the parties did not reasonably anticipate.
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A court may refuse to enforce the entire contract, strike the unconscionable clause, or limit the clause to avoid an unconscionable result. Limitation of consequential damages for personal injury in consumer goods is prima facie unconscionable.
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No. The buyer's right to reject the whole when tender fails in any respect applies unless the parties have agreed to a contractual limitation of remedy under sections 2-718 and 2-719. The limitation must be part of the contract to override the default rejection rights.
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Such a limitation is prima facie unconscionable when it applies to consumer goods. A court may therefore refuse to enforce the limitation and allow the personal injury claim to proceed under the general damages rules.
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