They are probable consequences or losses contemplated by the parties at contract formation. Later, in the case of Regional Power Corp v Pacific Hydro Group Two Pty Ltd (No.2) [2013] WASC 356, the Supreme Court of Western Australia said that a clause excluding consequential loss should be interpreted by looking at the contract as a whole. Cobar sought to rely on a contractual provision entitling Cobar to terminate the contract for breach if, in Cobar's opinion, the breach was material and incapable of remedy. (b)      Nothing in paragraph (a) will preclude the recovery by [the Customer] of loss or damage which may fairly and reasonably be considered to arise naturally, that is according to the usual course of things, from the breach or other act or omission giving rise to the relevant liability. Therefore, exemption clauses should be carefully worded to ensure consequential losses are evident, and intended to be excluded from liability. A normal loss for the business could be lost revenue from the person receiving the package. Interpreting indirect and consequential loss exclusion clauses within the context of the agreement as a whole. When drafting exclusion clauses it is best to specify which types of loss are excluded. It was the loss that a party suffered on account of breach of contract that was reasonably contemplated by the parties when they made their agreement. Keywords Damages, Classification, Consequential, Liquidated, Exclusion Clauses. 1 Introduction A recent decision of the Supreme Court of Western Australia considered the operation of a contractual clause that sought to limit or exclude, amongst other things, "indirect" or "consequential" damage or loss. Despite any other provision of this Lease, both Parties exclude, (and agree that they will have no rights against the other for) liability for consequential or indirect loss arising out of this Lease including (without limitation) in respect of loss of profits or loss of business.This clause does not apply in respect of wilful acts by either Party. What would an exclusion of consequential loss in a contract exclude? Exclusion clause trumps $67m consequential loss claim . Consider how the consequential loss exclusion impacts or interacts with other clauses of the contract, in particular indemnities or warranties. The WA Supreme Court rejected both constructions of the meaning of consequential loss. There is a great deal of confusion about what is meant by the term “consequential loss”. Common law also settles that contract terms are given their ‘natural and ordinary meaning’. 11.3 What will the ACCC consider when reviewing a merger? The Claimant ("the Buyer") purchased a ship from the Defendant ("the Seller"). The Australian case law on consequential loss has changed considerably over the past ten years and produced some surprising results. The Buyer sought damages which included: i. Yes. Therefore, the best approach when drafting an exclusion clause is to clea… Payment of damages for consequential loss doesn’t necessarily have to happen. Jenelle is a legal Intern at Lawpath as part of the Content Team. losses which fall under the second limb of Hadley -v- Baxendale (1854) 9 Ex. some areas, such as the meaning of ‘consequential loss’ in exclusion clauses, the judgments indicate a difference in approach. No universal meaning of consequential loss . In October 2011 Macmahon Mining Services entered into a design and construct contract for the development of Cobar Management's copper mine in New South Wales. The exclusion of certain types of losses along with a liability cap on recoverable losses is regularly seen in most industries. according to the usual c… Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace. It indicates a broadening of the court's interpretation of clauses excluding liability for 'consequential loss' by looking outside the definition of indirect losses falling within Hadley v Baxendale. simple legal protection, 2/23 Foster Street, Surry Hills, NSW 2010 Australia. It is clear from the Australian case law that concepts of “direct”, “indirect” and “consequential” loss do not have fixed and settled legal meanings. The principles under contract law are described under two limbs. In contrast, normal loss (or direct loss) naturally arises from a breach. 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