2015] CONSEQUENTIAL DAMAGES WAIVERS 7
No Consequential Damages. Notwithstanding anything
to the contrary contained in this Agreement or provided for
under any applicable Law, no party hereto shall be liable to
any other Person, either in contract or in tort, for any
consequential, incidental, indirect, special or punitive
damages of such other Person, [including] [or any] loss of
future revenue, [or] income or profits[, or any diminution of
value or multiples of earnings damages] relating to the
breach or alleged breach hereof, whether or not the
possibility of such damages has been disclosed to the other
party in advance or could have been reasonably foreseen by
such other party.
In addition to waiving “consequential” and “special”
damages, the provision waives damages that are “incidental,”
“indirect,” or “punitive” and damages that are or derive from a
“loss of revenue,” “loss of income,” “loss of profits,” “diminution of
value,” or “diminution of multiples of earnings.” While these
terms are commonly waived together as a string of boilerplate
synonyms, many of these terms are subject to unique
interpretations.
A. State Interpretation
Importantly, one should be aware that state law varies in the
interpretation of these words. In Texas, for example, a court may
classify damages as direct if they are implicitly or explicitly
classified as such in the contract, even if they would otherwise be
considered consequential.
In Tennessee Gas Pipeline Co. v.
Technip USA Corp., Tennessee Gas Pipeline (“TGP”) hired Technip
USA to construct a pipeline upgrade.
The contract obligated TGP
to provide services at the site, including permit and water services,
as well as providing operations personnel.
The upgrade took
longer than anticipated due to delays involving components,
technology, labor shortages, and weather.
TGP sued for increased
. Id. at 778 (emphasis added).
. McKinney & Moore, Inc. v. City of Longview, No. 14-08-00628-CV, 2009 Tex.
App. LEXIS 9299, at *5 (Tex. App.—Houston [14th Dist.] Dec. 8, 2009, pet. denied) (“[B]y
definition, if particular damages are specifically accounted for in the contract, they are
direct, not consequential in nature.”). It is also worth mentioning that state categorization
of damages affects whether a party’s pleadings are sufficiently pled. For example, in
Texas, direct damages do not require a special pleading, whereas consequential damages
must be specifically pleaded. TEX. R. CIV. P. 56.
. Tenn. Gas Pipeline Co. v. Technip USA Corp., No. 01-06-00535-CV, 2008 Tex.
App. LEXIS 6419, at *2 (Tex. App.—Houston [1st Dist.] Aug. 21, 2008, pet. denied).
. Id. at *8.
. Id. at *3.