UNDER NO OBLIGATION
of profits, revenue, business, goodwill, indirect or consequential loss or damage …”. IBM’s liability to Fujitsu was further capped to an amount of £5m in each contract year and £10m in aggregate for “any claims or losses”. The court held that the language of the limitation of liability clause was “on the face of it clear and unambiguous” and that liability for loss of profits, which include workshare, change control and money value claims, was excluded. The exclusion was further read in the context of the entire exclusion clause and the contract as a whole, further having regard to the material background and circumstances at the time the subcontract was entered into.
In coming to its conclusion, the court held that there was nothing in the contract and the context of the surrounding clauses that pointed to any different construction than a simple application of the language of the exclusion clause. The court further held that (i) the length and detail of the subcontract; (ii) the sophistication of the parties; (iii) the equality of bargaining power between the parties; (iv) the mutuality of the limitation of liability clause; (v) the availability of other remedies; (vi) the fact that both parties had received legal advice; and (vii) as the full exclusion clause was tailor-made all contributed to supporting a straightforward application of the limitation of liability clause. It was also held that an alternative, commercially sensible meaning could not be identified in favour of Fujitsu. Fujitsu argued that: Liability for a breach of IBM’s fiduciary duty was not excluded by the