MSCD5: The Section on “Consequential Damages”

I have a sweet writing process. First, write something and publish it. After a few years, realize it’s not great. Take another crack at it, think it’s OK, then decide that in fact it’s still not great. Redo it. Ask knowledgeable people to look at it. Repeat the cycle a few times. It’s annoying but also entertaining, somehow. At least for me!

Recently I’ve gone through that process with consequential damages, with a view to creating a new section on the subject for the fifth edition of A Manual of Style for Contract Drafting. This blog post from three weeks ago represents an earlier stage. Since then, I’ve gone through a couple of further drafts. Now I’m at the point where I have what will go in MSCD5, subject to whatever tweaks I come up with in the next week or two.

What’s required to tackle an MSCD topic depends on the nature of the confusion that surrounds it. If the dysfunction is profound enough, I have to do a top-to-bottom overhaul. That’s been the case with, for example, efforts provisions and represents and warrants. By contrast, making sense of consequential damages requires picking from alternative meanings rather than proposing a different meaning. And for once, I’ve been able to consult legitimate scholarship, namely this article by Glenn West and Sara Duran and this article by John Clifford, Charlotte Conlin, and Graham Bevans.

So my task has been to summarize relevant details—just what’s required for context and to support my analysis. Next, I have to offer recommendations, with the aim of being resoundingly practical. In this case, I hope I’ve concisely outlined the alternatives, and I offer what I hope is novel but sensible contract language.

Go here for a PDF of what I propose putting in MSCD5. If anything catches your attention, by all means post a comment or email me.

(For all posts about the fifth edition of A Manual of Style for Contract Drafting, go here.  If you find this post useful, you might be interested in the training I offer. Go here for information.)

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.

2 thoughts on “MSCD5: The Section on “Consequential Damages””

  1. > 1.20 And here’s a final limitation-of-liability option: a buyer might be more willing to live with a limited range of damages if it’s entitled to liquidated damages.

    That’s a useful negotiating fallback suggestion. My first thought was that a first draft could proactively offer that up as part of a “fair and balanced” package (if you’ll pardon the expression). But doing so could kick a sleeping dog and cause the party that would be entitled to liquidated damages to respond by demanding a sky’s-the-limit number.

    Reply

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