Exclusion of Liability for 'Consequential Loss'

Abstract

One of the first things that most lawyers learn when they enter the real world of commercial transactions is that liability for “consequential losses” is to be excluded under all contracts that they negotiate. In 30+ years of in-house practice, I have never known a company to have an “open” policy on this point. But what are these “consequential losses”; why are they so roundly feared by the business community; and, how can we build exclusion clauses that work?