Wilful misconduct and deliberate default in commercial contracts
Produced in partnership with Tim Wright of Fladgate LLP
Wilful misconduct and deliberate default in commercial contracts

The following Commercial guidance note Produced in partnership with Tim Wright of Fladgate LLP provides comprehensive and up to date legal information covering:

  • Wilful misconduct and deliberate default in commercial contracts
  • What is an exclusion or limitation of liability clause?
  • What do the terms used in these types of clauses mean and why is this important?
  • Common terms
  • Effect of deliberate repudiatory breach
  • Drafting issues
  • Application of the Unfair Contract Terms Act 1977

This Practice Note sets out guidance upon the meaning, use and importance of commonly used terms in exclusion and limitation of liability clauses in commercial agreements, including the terms: abandonment; wilful misconduct; and deliberate default. It considers how these terms have been interpreted via case law and includes tips for parties when drafting and negotiating commercial agreements.

What is an exclusion or limitation of liability clause?

An exclusion clause is a contractual term which sets out exclusions upon liability. It is sometimes referred to as an exemption clause. A limitation of liability clause is a contractual term which sets out limitations upon liability. Both of these types of clauses are subject to statutory and common law controls. For more on those general controls, see Practice Note: Exclusion and limitation of liability and for an example limitation of liability clause, see Precedent: Limitation of liability clause.

What do the terms used in these types of clauses mean and why is this important?

The terms used in a limitation of liability or exclusion clause will dictate the clause’s application to certain scenarios and may protect a party from liability for certain forms of damage, even where such damage is a result of the party’s breach. Therefore, even if a party admits that it has committed a breach of contract, it may