Skip to main content

Do express disclaimer and limitation of liability clauses in a commercial contract prevent a party from asserting tort claims?

San Jose, CA |

My software company (LLC, me and another guy) entered into a signed agreement to write a program for a larger company. Even though there were disclaimer and limitation of liability provisions, the company is now trying to assert several tort claims against us even though tort damages were expressly excluded as a basis for liability in the contract.

Will the courts in CA uphold the disclaimer and limitation clauses?

Attorney Answers 7

Posted

You should have a business lawyer in your area review the underlying documents and provide an opinion. You should also provide that lawyer with the demand letter or lawsuit paperwork if suit has been filed. You should act promptly to avoid unnecessary problems.

This answer does not constitue legal advice, nor does it creat an attorney/client relationship. If you are seeking legal advice upon which you intend to rely, you should hire competent cousel familiar with this area of the law in your locale.

Mark as helpful

7 lawyers agree

1 comment

Asker

Posted

Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Posted

A superficial analysis is "probably the courts will uphold the contractual language."
The devil, however, is in the details. A competent lawyer would want to view the contract, learn more about then controversy, and then give you advice you can rely on (which is not the same as a guaranty of an outcome.)

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

Mark as helpful

9 lawyers agree

1 comment

Asker

Posted

Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Posted

To answer your fist question: No document will ever prevent another party from asserting claims agaisnt you in a lawsuit. Anyone with time on their hands and the money for a filing fee can sue you. With that being said, whether the person suing you will ultimately win their case is a different story. Exclusions in contracts may very well prevent a party from obtaining a judgment against you for damages for the excluded claims.

I agree with the other attorneys that you will need to have an attorney review the documents and the allegations against you to give you a fair opinion of the company's liklihood of success in its claims against you.

Mark as helpful

8 lawyers agree

2 comments

Asker

Posted

Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Kristina Michelle Reed

Kristina Michelle Reed

Posted

I assume that you are asking if the plaintiff can plead causes of action that are at odds with each other. Generally, yes, plaintiffs can plead differing causes of action. To answer specifically, I would need to review the contract and the Complaint. It could be that even if the written contract is ultimately rescinded by the Court, the plaintiff could prevail on an oral contract theory for breach of contract. But, without reading the Complaint and the contract, it is hard to say how successful they will be in their Complaint. If you mean that either you or the plaintiff sent a Notice of Rescission, that may be a defense to their Complaint. Again, I would really need to read the Complaint and the contract to give you specific advice.

Posted

I agree with Mr. Boss and Mr. Doland -- you need to have an attorney review the contract and allegations. I would add, however, that a party in California cannot absolve itself from fraud during the transaction by putting such exculpatory language in a contract.

The information/answer is not, nor is it intended to be, legal advice. Consult an attorney regarding your individual situation. This attorney is only licensed to practice law in California. Your question and this answer do not create an attorney-client relationship. Do not send/post any confidential information.

Mark as helpful

7 lawyers agree

1 comment

Asker

Posted

Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Posted

Courts generally enforce contracts. However, no one can really answer your question without reading the contract and learning the facts of the dispute.

Mark as helpful

7 lawyers agree

2 comments

Asker

Posted

Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Paul Bradley Schroeder

Paul Bradley Schroeder

Posted

Again, I would need to see all the paperwork, but pleading alternative remedies is permissible and common. If there is a complaint on file, you need a lawyer.

Posted

It depends on the nature of the tort. Intentional torts cannot be waived as a matter of public policy. Beyond that, my colleagues are correct that you would have to have the contract reviewed by a good business attorney.

Sincerely,
Craig T. Byrnes
www.ctblawfirm.com
310-706-4177

Disclaimer: Please be aware that I am not offering legal advice, nor forming an attorney-client relationship with you. I am not representing you, nor doing anything to protect your legal rights. If you believe that you have suffered a legal wrong, take action before any statute or limitations expires, or your right to do so may be lost forever. Good luck in your legal matter.

Mark as helpful

5 lawyers agree

1 comment

Asker

Posted

Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Posted

Generally, provisions of this sort in a commercial contract (not so much in a consumer contract) are enforceable, provided they are specific enough, address the particular situation and clearly written. This said, as the other lawyers responding note, the devil is in the details, and for that reason you will need legal help in this quite technical area unless you can persuade them to go away, perhaps by noting the attorney fee clause your contract probably (maybe?) has in case they sue. This door swings both ways, however, and a big part of evaluating a case like this involves assessment of liability for legal expense. I note also that claims of fraud in the inducement (false promises) frequently are alleged to try to avoid warranty disclaimers and limitations of the type you mention.

Mark as helpful

6 lawyers agree

2 comments

Asker

Posted

Yes, they have alleged a cause of action for "negligent misrepresentation" which may be a stand-in for the "fraud in the inducement" action you mention. Another twist: of what effect (if any) is a notice of rescission of the contract IN THE COMPLAINT, the same complaint which alleges breach of contract, negligence, professional negligence and negligent misrepresentation? If they purport to rescind the contract, can they still claim breach?

Benjamin H. Ballard

Benjamin H. Ballard

Posted

Rescission is a remedy to cancel the contract, to restore the status quo as if it never existed. There may be consequential or incidental damages recoverable in a rescission, but generally the claimant eventually have to pick his poison - either rescind or affirm the contract and ask for damages for breach. But this won't happen until the trial phase. As said before, this is technical stuff legally and factually. I wouldn't proceed without a lawyer. Incidentally, as the Avvo disclaimers affirm, my comments here aren't intended to create a lawyer/client relationship and shouldn't be relied on as it one did exist.

Business topics

Top tips from attorneys

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics