Warning
Info
Warning
Info
Simple English definitions for legal terms
limitation-of-remedies clause
Read a random definition: personal tithe
A quick definition of limitation-of-remedies clause:
A limitation-of-remedies clause is a part of a contract that says what can happen if one person doesn't do what they promised. It limits the things the other person can do to make things right. This is usually okay, but sometimes it's not fair if it stops the other person from getting what they really need.
A more thorough explanation:
A limitation-of-remedies clause is a part of a contract that limits the available remedies if one party fails to fulfill their obligations. This means that if one party breaches the contract, the other party may not have all the options available to them to seek compensation or other remedies.
For example, a software company may include a limitation-of-remedies clause in their contract with a customer. If the software does not work as promised, the customer may only be entitled to a refund of the purchase price, rather than being able to sue for additional damages.
Under the Uniform Commercial Code (UCC), a limitation-of-remedies clause is generally considered valid, as long as it does not fail of its essential purpose or unconscionably limit consequential damages. This means that the clause must still provide some meaningful remedy for the non-breaching party, and cannot unfairly limit their ability to seek compensation for damages caused by the breach.
Another example of a limitation-of-remedies clause might be in a lease agreement for a rental property. If the tenant fails to pay rent, the landlord may only be able to evict the tenant and keep any security deposit, rather than being able to sue for additional damages or unpaid rent.