Macfarlanes

Know your limitations — litigation and dispute resolution

Inserting an exclusion clause into a contract will reduce a party’s liability to pay damages but it will increase the chances of an injunction being made on the basis that damages are not an adequate remedy. That is the effect of the recent Court of Appeal decision in AB v CD [EWCA] Civ 229.

ŠŠIn AB v CD, the claimant sought an interim injunction restraining the defendant from terminating a licence to use an internet-based marketing platform.

The claimant argued that damages would not be an adequate remedy if it was subsequently decided (at an arbitration) that the defendant had wrongfully terminated the licence, because an exclusion clause in the licensing agreement prevented the claimant from recovering damages for all of its losses…

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