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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

  1. 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.

  2. 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 terms and conditions item 9, incorporated as if it was reprinted here.

  3. 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.

  4. 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.

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

  6. 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.

    Craig T. Byrnes

    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.

  7. 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.

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