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Alex J.
Alex J., Solicitor
Category: Law
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Experience:  Solicitors 2 years plus PQE
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My company provides research and analysis services range

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My company provides research and analysis services for a range of clients in different industries. So we provide information that a client may use to make business decisions. In this context, from a contractual perspective, what would be a client's direct as opposed to indirect losses, assuming that we can exclude the former, but not the latter?
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. An indirect or consequential loss may be something such as a missed opportunity as a result of relying on your information - or a penalty or service credit payable to a client or supplier that has arisen from the terms of the contract they enter into as a result of your information. I think however the bigger issue will be losses of profit, you should exclude direct and indirect losses of profit, as these wont just be covered by the direct or indirect heads of losses - I would also expressly exclude loss of goodwill, while this could a direct or indirect loss it cannot really be quantified and should be excluded. Can I assist you any further? Can you provide any information of the kind of research and analysis you do?
Customer: replied 1 year ago.

Hi AJ, that is interesting and a bit surprising i.e. that excluding losses does not exclude 'losses of profit'. Can you give an example to make this clearer?

In terms of our research, this might include, say, 'market research' to look at opportunities for a particular product in a selection of countries i.e. which countries would be the most attractive. In general we focus in the areas of procurement, strategy and financial research.

HI, Thank you. Profit is a distinct head of loss and as long as it is reasonably foreseeable and a naturally occurring consequence of the breach it can be claimed as a loss arising from contractual breach. It is therefore always best to specifically exclude losses rather than rely on arguing that they fall under the header of an indirect or direct loss. Also the justification for it is, you wont share in their profits if they make then, so why should you be liable for them if they lose them? Presumably they dont make the decision based solely on your research, your research is a information tool, they will make the decision following their own business processes?
Customer: replied 1 year ago.

Yes, your final sentence is correct and we also, whenever possible to include, have a standard clause making it clear that all decisions are for them to make at their own risk. It still seems odd that there can be a 'loss' that is neither direct or indirect!

Hi, Thank you. Sorry for the misunderstanding a loss of profit is either a direct or indirect loss of profit. Beat practice requires that you carve our losses of profit as excludes losses separate from the normal direct or indirect losses that may arise from a contractual breach. I would not rely on just an exclusion for indirect and consequential loss to exclude profit as a head of loss that can be claimed, I would always make sure you carve out losses of profit separately.
Customer: replied 1 year ago.

OK, understood and thanks.

Can I assist any further? I am a company and commercial lawyer so I have substantial experience in limitation of liability clauses. Any feedback is gratefully received. Thank you AJ
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