Can An Exclusion Clause Or Liability Cap Apply To A Deliberate Or Fundamental Breach? (Mott MacDonald V Trant Engineering)

Published date11 May 2021
Subject MatterCorporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
Law FirmBryan Cave Leighton Paisner LLP
AuthorMr Marcus Birch

Summary

In Mott MacDonald Ltd v Trant Engineering Ltd [2021] EWHC 754 (TCC) , the TCC held that a clause in a professional services agreement containing a cap on liability, exclusions on liability, and a net contribution clause applied even to fundamental, willful or deliberate breaches of contract. In this casenote, first published by LexisPSL, Marcus M Birch takes a closer look at this case.

Mott MacDonald Ltd v Trant Engineering Ltd [2021] EWHC 754 (TCC)

Construction analysis: The Technology and Construction Court gave summary judgment, holding that a clause in a professional services agreement containing a cap on liability, exclusions on liability, and a net contribution clause applied even to fundamental, willful, or deliberate breaches of contract. It did so on the basis that the clause was worded broadly enough to cover such breaches, and there was no need for it expressly to refer to them. The court upheld longstanding authority on the interpretation and application of exclusion clauses. As a result, when the case proceeds to trial, the counterclaim valued at around '5m will need to overcome all the exclusions and will in any event be worth at most '500,000. Written by Marcus M Birch, associate director at Bryan Cave Leighton Paisner LLP, London.

What are the practical implications of this case?

This case restates and reaffirms the court's established approach to interpreting and applying exclusion and limitation clauses. It repeats that there is neither a rule of law whereby clauses do not apply where the party seeking to rely on them was guilty of a deliberate or fundamental breach, nor any presumption that clauses will be interpreted narrowly so as not to apply in such cases.

The case is important for contractors, consultants and professional advisers in maintaining the certainty of the law in this area. Parties can continue to rely on the clear wording of precedent exclusion clauses, and to limit their exposure by liability caps without concern that the clause will be disregarded in a dispute because of particular facts. The same certainty is of obvious value to professional indemnity insurers.

For legal practitioners concerned with the drafting and interpretation of contracts in this sector, the case confirms the primacy of text over context and comforts the use of generally-worded exclusion and limitation clauses. Provided the wording is broad and general, there is no need for such clauses to list 'for the avoidance of doubt' the various...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT