Also known as: U.C.C. 2-719 · Uniform Commercial Code § 2-719 · UCC § 2-719 · § 2-719 · 2-719 · limitation of remedies
Written by attorneys · grounded in primary & secondary sources — see below
A statutory rule in Article 2 of the Uniform Commercial Code that permits parties to a sales contract to provide for remedies in addition to or in substitution for those otherwise available under the Code. The rule allows the parties to limit the buyer's remedies to repair or replacement of nonconforming goods. When an exclusive or limited remedy fails of its essential purpose, the buyer may resort to any remedy available under the Code, and limitations on consequential damages remain enforceable in commercial transactions unless unconscionable.
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Ulf Ulfsson bought ten custom display cases from Urban Logistics under a contract that limited remedies exclusively to repair by the seller. After several weeks of unsuccessful repair attempts, the cases continued to malfunction and damaged valuable artifacts. Ulf then pursued damages for the nonconforming goods and consequential losses. The court allowed recovery beyond repair because the exclusive remedy had failed of its essential purpose.
Una Ueda purchased an automated claims scanner from Ultra Precision under a contract that limited remedies to replacement and excluded consequential damages. The scanner repeatedly malfunctioned despite multiple replacements. Una sought full damages including lost profits from downtime. The court enforced the consequential damages exclusion because the transaction was commercial and the limitation was not unconscionable.
An exclusive repair-or-replacement remedy fails of its essential purpose when the seller cannot cure the nonconformity within a reasonable time despite repeated attempts. The buyer then regains access to all Code remedies, including damages. Courts focus on whether the limited remedy actually delivered conforming goods.
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Limitations on consequential damages are enforceable in commercial transactions unless unconscionable. The Code treats such exclusions as valid risk allocations between sophisticated parties. Unconscionability requires a showing of unfair surprise or oppression on the specific facts.
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A contractual limitation of remedies does not automatically bar rejection when the tender fails to conform. The limitation is subject to the failure-of-essential-purpose rule and must be expressly exclusive to displace other remedies. Buyers retain the option to reject unless the contract clearly substitutes a limited remedy.
…warranties were included within the parties's original agreement, we must conclude that adding the disclaimer of warranty and limitation of remedies provisions from the box-top license would, as a matter of law, substantially alter the distribution of risk between Step-Saver and TSL. Therefore, under UCC § 2-207(2)(b), the disclaimer of…
…below the validity of those requirements and whether they are met by the employer's arbitration agreement.[^maj-8] 1.
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UCC 2-719 addresses limitations on remedies after a warranty breach, while disclaimers under 2-316 prevent warranties from arising. A valid disclaimer eliminates the underlying warranty claim, but a limitation clause assumes the warranty exists and merely restricts the available relief. Both provisions can appear in the same contract.
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