LIMITATION OF LIABILITY.

Thinking judge

Here is a typical “limitation of liability” in a user agreement.

In no event will the Operator be liable to any person for any indirect, incidental, special, punitive, cover or consequential damages (including, without limitation, damages for lost profits, revenue, sales, goodwill, use of content, impact on business, business interruption, loss of anticipated savings, loss of business opportunity) however caused, under any theory of liability, including, without limitation, contract, tort, warranty, breach of statutory duty, negligence or otherwise, even if the liable party has been advised as to the possibility of such damages or could have foreseen such damages.

Now, remember that Dr. Boli’s doctorate of laws was conferred honoris causa, and furthermore not by Americans, so he does not understand American law, and is willing to be instructed by the lawyers among his readers.

The obvious meaning of the clause is this: No matter how careless I am, and even if you told me I was being careless and would probably hurt you, I am not liable for any damages I cause to you, under any legal theory known to man.

The agreement is one to which you agree simply by using the service: “By accessing and using the Website and Services you agree to be bound by this Agreement.” Many of these “agreements” run over twenty thousand words. By using the service, you have agreed that you have read the agreement, but you did not.

It seems to Dr. Boli that there are three possibilities here:

1. This “limitation of liability” is valid, and therefore all the personal-injury attorneys and other liability lawyers in the world will do you no good against anyone who has copied and pasted this clause into a user agreement to which you agreed simply by existing; and soon there will be no damages awarded to anyone, and all those contingency-fee attorneys who advertise on billboards will starve.

2. This “limitation of liability” will not stand up in court if in fact the liable party knew or should have known that the conduct in question was likely to cause damage, and the lawyer who put those words in there and told his client “this will protect you” was lying.

3. An American lawyer is something between a faith healer and a witch doctor, someone who tries to convince himself that his rituals and incantations are doing some good, even though his senses perceive only a puff of blue smoke and a foul odor.

These are the three possibilities that occur to Dr. Boli when he reads a “limitation of liability” like this one. But Dr. Boli would be interested in hearing from an American lawyer who can explain the current state of the law.

Comments

  1. RepubAnon says:

    This is based on the ancient legal principle of “people typically don’t read the fine print, especially in ‘click-through’ clauses.”

    Case in point: “Back in 2005, one lucky PC Pitstop customer won $1,000 by simply reading our End-User License Agreement (EULA) We temporarily added a clause to our EULA offering money to anyone who contacted us, but it took five months and more than 3,000 sales before the first person – dropped us a line asking about the clause.” https://www.pcmatic.com/blog/it-pays-to-read-license-agreements-7-years-later/

    Abusive may be one problem that AI could solve. It seems to be able to read and summarize documents fairly competently, so feeding an EULA to an AI bot and asking what each side’s duties are could start discouraging these one-sided clauses.

    NOTE: The clause doesn’t seem to limit direct damages (“I didn’t get what I paid for”) – there’s usually a companion clause limiting direct damages to the purchase price.

    Direct versus indirect damages can be displayed by the “for want of a nail, a horseshoe was lost…” poem. Direct damages are the horseshoe nail, the indirect and consequential damages were the loss of the horseshoe, horse, battle, kingdom…”

  2. I assume this is the same principle as that behind insurance companies denying claims unless and until the denial is appealed.

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