Definition of consequential loss included wasted ‘spread costs’


The Court of Appeal (“CA”) upheld some mutual indemnities applicable to both parties, with the result that a contractor succeeded in excluding liability for certain wasted costs under consequential loss as defined in the contract. The CA relied on the plain meaning of the wording and did not apply restrictive principles of interpretation, commonly used to cut down the effect of limitation clauses.


The expression “Consequential Loss” shall mean:

(i) any indirect or consequential loss or damages under English law, and/or

(ii) to the extent not covered by (i) above … loss of use (including, without limitation, loss of use or the cost of use of property, equipment, materials and services including without limitation, those provided by contractors or subcontractors or by third parties) ...

whether or not such losses were foreseeable at the time of entering into the contract and, in respect of paragraph (ii) only, whether the same are direct or indirect ”.


Points to note:

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