Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC Electrical Engineering Company Limited (ABC) has contracted to provide their services to XYZ Storage Company Limited (XYZ), to provide them with the electrical; engineering

ABC Electrical Engineering Company Limited (ABC) has contracted to provide their services to XYZ Storage Company Limited (XYZ), to provide them with the electrical; engineering specifications for the building of a warehouse. One of the clauses in the twenty page signed contract states that:

Clause 20. Whilst ABC undertakes to perform all services with due care and diligence, the liability of ABC Electrical Engineering Co Ltd to the client arising out of the performance or non-performance of the said services shall be limited to a maximum of $150,000.

The work goes ahead and the warehouse is completed. Six months later, a fire breaks out in the warehouse and investigators trace it back to an electrical fault. The electrical who was sub-contracted from another firm to do the work claims she followed all specifications exactly as stated and it is clear that no fault is attributed to her or to her firm.

The specifications are examined and it is found that the new type of material used in some of the fittings had not been correctly calculated for in the specifications by ABC, although it had been noted that it was to be used.

Damages amount to $600,000. ABC Claims that if it is liable at all, this should be limited to $150,000. XYZ claims the full amount of the damages from ABC.

Is exclusion clause rule applicable in this scenario?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Legal Environment Of Business A Managerial Approach Theory To Practice

Authors: Sean Melvin, Enrique Guerra-Pujol

4th Edition

1260247805, 978-1260247800

More Books

Students also viewed these Law questions

Question

Explain the importance of Human Resource Management

Answered: 1 week ago