Imagine a Logistics Services Agreement, where Party A agrees with Party B that the latter shall service provider goods (of Party A) to another country. So far a simple logistics agreement.
1. The contract says that there is limitation of liability for Party B (the service provider) when it comes to damage to goods. I assume this is pretty common.
2. There is however also a limitation of liability when it comes to damages other than damages to goods, such as financial loss and consequential damage. At this point, the service provider would be liable up to a million euros.
Is the fact that there is liability for financiall loss and consequential damage normal? I mean, is this not more or less indirect damage? Should the service provider accept liability to those kinds of damage? What is the best the the service provider could do to 'adapt' this provision? Further limiting the amount? Not accepting it? Or is it actually a common provision for the service provider to accept
3. The third provision in the contract says that there is no limitation on liability in the cases of misconduct or gross negligence by the service provider, causing damages. Is this a common provision to be accepted by the service provider?
4. The limit mentioned in no. 2 shall also noy apply when there is a breach of material contractual obligations.
Is this a common/normal provision to be accepted by the transporter?
5. The Service Provider shall be liable for damage to goods in connection to Pest control and infestation.
Is this normal for the service provider to accept?
- Is there any international convention/regulation that would apply to this Services Agreement (I guess the CISG Convention does not apply since it excludes services and labour) And if so, can the contract exclude such convention?
- What tips do you have for the service provider regarding these provisions (to negotiate in liability clause)
1 Answer from Attorneys
It may be late, but I just read your question.
1. Usually the service provider does not want clauses where he is liabe for consequential damages, as they may be high and unforeseeable. So exclude all consequential damage, or limit it to as less as possible.
2. Generally speaking one is fully liable for damages caused by intent and gross negligence. Dependent on what is meant by misconduct one could and should try to limit liability.
3. Part of the services rendered will be transport services. Liability of carriers is governed by International instruments like the CMR Convention and national legislation. Perhaps it is an idea to limit all liability in accordance with such conventions and legislation.
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