Loss of profit exclusion clauses — no 'get out of jail free' card

Somewhat controversially, the Court of Appeal has construed a loss of profit exclusion clause against its apparent plain English meaning so as to allow a claim. Daniel Newbound takes a look at what this means for those drafting and relying on such clauses.

The recent case of Kudos Catering (UK) Limited v Manchester Central Convention Complex Ltd concerned a situation where a party sought to rely upon an exclusion clause to exclude its liability for loss of profit in relation to a repudiatory breach of contract. In its decision, the Court of Appeal interpreted an exclusion clause against its apparent plain English wording so that it did not exclude the claimant’s loss of profit claim. This decision has interesting implications for parties seeking to rely upon exclusion clauses and for those drafting them.

Kudos is a catering company that contracted with Manchester Central Convention Complex Limited (MCCC), the owner of a large conference and exhibition centre, to provide catering services at the venue for a five-year period…

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