Cumulative Remedies? No Thanks

Readers tell me that businesspeople keep asking them to cut from contracts that which is unduly risk-averse or plain old unnecessary. Lawyers might be inclined to attribute that to businesspeople doing what they gotta do. In this view of things, lawyers are a bulwark against rank expediency.

But there’s is a lot of fat in contracts, and in the coming months I intend to write an article exploring that. Today, I’ll limit myself to considering one instance of fat, the “cumulative remedies” provision.

You know the sort of thing. Here’s a random one from that great Pacific garbage patch, Edgar:

Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under applicable Laws.

Negotiating and Drafting Contract Boilerplate (ed. Tina L. Stark 2003) contains useful background information on boilerplate provisions. Here’s some of what it says about the “cumulative remedies” provision (citations omitted):

The modern day general rule is that all remedies, whether at common law, under statute, or under equitable principles, are cumulative. In the event of a breach of contract, the nonbreaching party is allowed to pursue any and all remedies that may be available under the facts of the particular case during litigation, even though some of those remedies may be inconsistent with each other. Ultimately, a court will require a plaintiff to choose between inconsistent remedies as necessary to avoid overcompensating the plaintiff. Generally, this must be done after the verdict is entered and prior to the entry of judgment, although there is substantial discretion left to the courts as to this timing, and in some cases courts have compelled election quite early where they felt that evidence as to both remedies was confusing. Finally, the question of whether two remedies are inconsistent in any particular case is heavily fact dependent and here too trial courts have substantial discretion in allowing a plaintiff to pursue multiple, seemingly inconsistent remedies.

Might there ever be a context where a “cumulative remedies” provision makes sense? Again, here’s Negotiating and Drafting Contract Boilerplate:

When the parties truly intend to have cumulative remedies apply, it is tempting to conclude that the modern day common law rule covers the situation and toss out the cumulative remedies provision as needless boilerplate. There are times, however, that the provision serves as more than a calcification of the common law. Perhaps most importantly, it removes uncertainty as to whether an individual state’s law is applying the modern default rule or a classic election of remedies approach. A cumulative remedies provision, if purposefully chosen, also will remove possible ambiguity about whether “special” remedies provided in one portion of the contract were intended by the parties to be the exclusive remedy for a particular breach.

Regarding the notion that the “cumulative remedies” provision can spare you uncertainty over what the default rule will be in a given jurisdiction, I’ll accept that as a justification only if someone shows me some evidence for that sort of uncertainty.

As for including a “cumulative remedies” provision in a contract that provides for special remedies (such as liquidated damages or an injunction), that concern could be addressed simply by saying “in addition to any other remedies available by law” or some such.

So that’s why I can’t remember the last time I elected to insert a “cumulative remedies” provision in a contract.

Would my analysis be any different under English law? I consulted my copy of Mark Anderson and Victor Warner’s A-Z Guide to Boilerplate and Commercial Clauses but didn’t find a discussion of the broader context. Unless anyone presents compelling evidence to the contrary, I have no reason to assume that the implications of the “cumulative remedies” provision under English law are different from what they are under the law of U.S. jurisdictions.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.