It is common for contractors to request the inclusion of an exclusive remedies clause in a contract. However, from the perspective of an owner, the danger of an exclusive remedies clause is that it may prevent the owner from recovering any type of damages not specifically provided for in the contract.
This note examines the use of an exclusive remedies clause and the steps that should be taken by an owner to protect its position if it must include an exclusive remedies clause in a contract. In particular, we focus on protections for the owner if the liquidated damages regime is held to be invalid and unenforceable.
THIS DOCUMENT HAS BEEN PREPARED FOR THE PURPOSES OF THE PPP IN INFRASTRUCTURE RESOURCE CENTER FOR CONTRACTS, LAWS AND REGULATIONS. IT IS A CHECKLIST FOR GENERAL GUIDANCE PURPOSES ONLY AND SHOULD NOT BE USED AS A SUBSTITUTE FOR SPECIFIC LEGAL ADVICE FOR A PROJECT.
PPP in Infrastructure Resource Center for Contracts, Laws and Regulations (PPPLRC)