Limitation of liability clause

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This communication is confidential and may be subject to professional privilege. All legal relationships are subject to NautaDutilh N.V.’s general terms and conditions (see https://www.nautadutilh.com/terms), which apply mutatis mutandis to our relationship with third parties relying on statements of NautaDutilh N.V., include a limitation of liability clause, have been filed with the Rotterdam District Court and will be provided free of charge upon request. Dutch law is applicable and disputes shall be submitted exclusively to the Amsterdam courts. NautaDutilh N.V.; corporate seat Rotterdam; trade register no. 24338323.

Pursuant to and in accordance with the terms and conditions of the GPA, Microsoft has the right to add or remove any Microsoft product to or from those subject to the GPA and to change the pricing therefor at any time from. Microsoft also has the right under the GPA to audit the Company’s records on a specified periodic basis to confirm the Company’s compliance with the GPA and to be reimbursed by the Company for the costs of any such audit in the event of any material discrepancies. The GPA includes a limitation of liability clause pursuant to which the aggregate liability of each of the parties will not exceed direct damages incurred up to a specified percentage of the amount paid by the Company to Microsoft under the GPA, subject to specified exclusions. The GPA shall remain in effect until the termination thereof by either party. Each party to the GPA has certain rights to terminate the GPA for cause, and either party may terminate the GPA without cause by giving the specified advance notice to the other party.

On September 24, 2012, we filed a lawsuit, captioned Peregrine Pharmaceuticals, Inc. v. Clinical Supplies Management, Inc., Case No. 8:12-cv-01608 JST(AN) (C.D. Cal), against Clinical Supplies Management, Inc. (“CSM”), in the U.S. District Court for the Central District of California. In 2010, we had contracted with CSM as our third-party vendor responsible for distribution of the blinded investigational product used in our bavituximab Phase IIb second-line NSCLC trial. As part of the routine collection of data in advance of an end-of-Phase II meeting with regulatory authorities, we discovered major discrepancies between some patient sample test results and patient treatment code assignments. Consequently, we filed this lawsuit against CSM alleging, among other causes of action, breach of contract, negligence, negligence per se, constructive fraud and negligent misrepresentation arising from CSM’s performance of its contracted services. We are seeking monetary damages. On June 5, 2014, CSM filed with the court a Notice of Motion and Motion for Partial Summary Judgment seeking partial summary judgment on our claims for damages on the grounds that the limitation of liability clauses contained in our master services agreement with CSM are valid and enforceable. Our opposition to CSM’s motion was filed with the court on June 23, 2014, and the hearing on the motion was held on July 28, 2014. On July 30, 2014, the court issued its order holding that the limitation of liability clause did not apply to our claims for active negligence, negligent misrepresentation and constructive fraud, but did apply to our causes of action for breach of contract, passive negligence and negligence per se. On March 27, 2015, CSM filed with the court a Notice of Motion and Motion for Partial Summary Judgment seeking partial summary judgment on our claims for damages on the grounds that the causes of action for negligence, negligence per se, negligent misrepresentation, and constructive fraud are barred by the economic loss doctrine, as well as that the causes of action for negligent misrepresentation and constructive fraud cannot be established as a matter of law. Our opposition to CSM’s motion was filed with the court on April 13, 2015 and CSM’s reply to our motion was filed on April 20, 2015. On June 22, 2015, the court issued its order granting CSM’s Motion for Partial Summary Judgment. On September 8, 2015, we and CSM entered into a confidential settlement and release agreement to resolve all claims related to the complaint we filed on September 24, 2012 against CSM. Pursuant to the terms of the Settlement Agreement, (i) all claims asserted in the litigation by us will be dismissed with prejudice, (ii) each of the parties to the litigation will receive a full release of all claims, of any nature whatsoever, whether known or unknown, and (iii) CSM will pay to us the sum of $600,000 within thirty (30) days. We will record the settlement amount when payment is received.

On March 15, 2013, Crescent Heights R&D, LLC (“Crescent Heights”), filed a complaint against Boomerang in the State of Florida for fraud, breach of contract and specific performance, as well as equitable rescission which alleged an unspecified amount of damages in excess of the purchase price. Boomerang was subsequently granted a motion to remove this matter to federal court. On May 17, 2013, the court entered an order that our motion to compel arbitration and stay proceedings be granted. The parties agreed to arbitrate the matter in front of the American Arbitration Association in November 2014. The dispute arose from a contract to provide a rack and rail automated parking system. Crescent Heights’ claims, Boomerang’s defenses and Boomerang’s affirmative claims all arose from the contract. On April 21, 2015, the arbitrator issued a Final Arbitration Award. The arbitrator denied Crescent Heights’ claims of fraud in the inducement, equitable rescission based on fraud, and declaratory relief to strike the limitation of liability clause, but found Boomerang in Breach of Contract. Crescent Heights was awarded damages of $1,197,890, plus attorneys’ fees and costs of $319,920, which Boomerang is required to pay in fiscal year 2015. During the nine months ended June 30, 2015, Boomerang paid $1,036,452 of the award, attorneys’ fees and costs related to the arbitration and established a reserve of $481,358 for the remaining fees and costs.

On March 15, 2013, Crescent Heights R&D, LLC (“Crescent Heights”), filed a complaint against Boomerang in the State of Florida for fraud, breach of contract and specific performance, as well as equitable rescission which alleged an unspecified amount of damages in excess of the purchase price. Boomerang was subsequently granted a motion to remove this matter to federal court. On May 17, 2013, the court entered an order that our motion to compel arbitration and stay proceedings be granted. The parties agreed to arbitrate the matter in front of the American Arbitration Association in November 2014. The dispute arose from a contract to provide a rack and rail automated parking system. Crescent Heights’ claims, Boomerang’s defenses and Boomerang’s affirmative claims all arose from the contract. On April 21, 2015, the arbitrator issued a Final Arbitration Award. The arbitrator denied Crescent Heights’ claims of fraud in the inducement, equitable rescission based on fraud, and declaratory relief to strike the limitation of liability clause, but found Boomerang in Breach of Contract. Crescent Heights was awarded damages of $1,197,890, plus attorneys’ fees and costs of $319,920, which Boomerang is required to pay in fiscal year 2015. Boomerang established a reserve of $1,517,810 for the amount of the award, attorneys’ fees and costs.

On March 15, 2013, Crescent Heights R&D, LLC (“Crescent Heights”), filed a complaint against Boomerang in the State of Florida for fraud, breach of contract and specific performance, as well as equitable rescission which alleged an unspecified amount of damages in excess of the purchase price. Boomerang was subsequently granted a motion to remove this matter to federal court. On May 17, 2013, the court entered an order that our motion to compel arbitration and stay proceedings be granted. The parties agreed to arbitrate the matter in front of the American Arbitration Association in November 2014. The dispute arises from a contract to provide a rack and rail automated parking system. Crescent Heights’ claims, Boomerang’s defenses and Boomerang’s affirmative claims all arise from the contract. On January 23, 2015, the arbitrator issued an Interim Arbitration Award. The arbitrator denied Crescent Heights’ claims of fraud in the inducement, equitable rescission based on fraud, and declaratory relief to strike the limitation of liability clause, but found Boomerang in breach of contract. Crescent Heights was awarded damages of $1,197,887, plus reasonable attorneys’ fees and costs. We expect the Arbitrator to issue a final arbitration award in April 2015, which will include the attorney’s fees and costs payable by Boomerang. Boomerang established a reserve of $1,372,887 for the amount of the award, plus reasonable attorneys’ fees and costs.

In October 2009 Boomerang Systems entered into a Contract (the “Contract”) with Crescent Heights R&D, LLC (“Crescent Heights”) to provide a rack and rail-type automated parking system for Crescent Heights. In March 2013, Crescent Heights filed a state court Complaint against Boomerang in the State of Florida alleging Fraud in the Inducement, Equitable Rescission based on Fraud, Mutual Mistake, and Breach of Contract related to the automated parking system, and seeking the remedies of specific performance, rescission of the Contract, and a Declaratory Judgment regarding a limitation of liability clause, as well an unspecified amount of monetary damages in excess of the Contract’s purchase price. Boomerang and Crescent Heights agreed to arbitrate the matter in Miami, Florida with the American Arbitration Association. In arbitration, Crescent Heights alleged an initial claim of $10,000,000, and later specified damages in a greater amount of $17,769,755.

On September 24, 2012, we filed a lawsuit, captioned Peregrine Pharmaceuticals, Inc. v. Clinical Supplies Management, Inc., Case No. 8:12-cv-01608 JST(AN) (C.D. Cal), against Clinical Supplies Management, Inc. (“CSM”), in the U.S. District Court for the Central District of California. In 2010, we had contracted with CSM as our third-party vendor responsible for distribution of the blinded investigational product used in our bavituximab Phase IIb second-line NSCLC trial. As part of the routine collection of data in advance of an end-of-Phase II meeting with regulatory authorities, we discovered major discrepancies between some patient sample test results and patient treatment code assignments. Consequently, we filed this lawsuit against CSM alleging breach of contract, negligence and negligence per se arising from CSM’s performance of its contracted services. We are seeking monetary damages. On March 7, 2013, we and CSM submitted to the court a proposed stipulation pursuant to which the lawsuit would be stayed for up to 120 days during which time we and CSM would participate in an alternative dispute resolution process, pursuant to our contract with CSM. The proposed stipulation was approved by the court on March 8, 2013. On June 26, 2013, we and CSM engaged in an alternative dispute resolution session that did not result in any resolution of our dispute. The aforementioned stay expired on July 6, 2013. We granted CSM until July 19, 2013 to file an answer to our complaint, which CSM did on July 11, 2013. The parties appeared in court in February 2014 for a scheduling conference at which the court scheduled the trial to commence in April 2015. On June 5, 2014, CSM filed with the court a Notice of Motion and Motion for Partial Summary Judgment seeking partial summary judgment on our claims for damages on the grounds that the limitation of liability clauses contained in our master services agreement with CSM are valid and enforceable. Our opposition to CSM’s motion as filed with the court on June 23, 2104, and the hearing on the motion was held on July 28, 2014. On July 30, 2014, the court issued its order holding that the limitation of liability clause did not apply to our claims for active negligence, negligent misrepresentation and constructive fraud, but did apply to our causes of action for breach of contract, passive negligence and negligence per se.

The Distribution Agreement includes a limitation of liability clause in favor of MS and its affiliates according to which the aggregate liability of those parties to the Company for each Licensed Product will not exceed direct damages incurred up to a specified percentage of the amount paid by the Company to MS for that Licensed Product under the Distribution Agreement. This limitation does not apply to attorneys’ fees and expenses incurred by MS in connection with certain indemnification obligations it has under the Distribution Agreement.

NautaDutilh N.V. has its seat at Rotterdam, The Netherlands and is registered in the Commercial Register in Rotterdam under number 24338323. All services and other work are carried out under a contract for professional services (“overeenkomst van opdracht”) with NautaDutilh N.V., subject to the general conditions of NautaDutilh N.V. These general conditions include, among other provisions, a limitation of liability clause and have been filed with the Rotterdam Court of First Instance. They can be consulted at www.nautadutilh.com and will be provided free of charge upon request.

AKD is a trade name of AKD N.V., with its registered office at Rotterdam (registered in the Trade Register of the Chamber of Commerce, number 24366820). All services and (other) activities are performed on the basis of a contract for professional services concluded with AKD N.V. The general conditions of AKD N.V. are applicable and contain a limitation of liability clause. The applicability of any other general terms and conditions is hereby expressly excluded. The general conditions have been deposited at the Rotterdam District Court under number 44/2009. Every liability is restricted to the sum paid in the case concerned under the (professional) liability insurance including the amount of the policy excess. On request the general conditions will be sent without charges. They are also available on www.akd.nl

This communication is confidential and may also be privileged. It is intended for use by the indicated addressee only. If you are not the intended addressee, we request that you notify us immediately and destroy this communication, as well as any attachments, without copying, forwarding, disclosing or using it in any other way. NautaDutilh Avocats Luxembourg shall not be held liable for any damage relating to the communication of data or documents. NautaDutilh Avocats Luxembourg is established in Luxembourg. All services rendered by NautaDutilh Avocats Luxembourg are subject to the general terms and conditions of NautaDutilh Avocats Luxembourg, which include, amongst other provisions, a limitation of liability clause and can be consulted at www.nautadutilh.com (under “Terms & Conditions”) and will be provided free of charge upon request.

12.4.1 LipoScience Indemnity of Agilent. Subject to the limitation of liability clause in Section 19, LipoScience will defend, indemnify and hold Agilent, its Affiliates and their respective directors, officers, employees and agents and their respective heirs and assigns harmless from any third party claims for bodily injury, death or tangible property damage, including reasonable attorney’s fees, arising as a result of LipoScience’s negligence, recklessness or wilful misconduct or arising as a result of sales or use of the Vantera Analyzer provided that any indemnification by LipoScience shall be diminished in proportion to the amount of negligence attributed to Agilent.

12.4.2 Agilent Indemnity of LipoScience. Subject to the limitation of liability clause in Section 19, Agilent will defend, indemnify and hold LipoScience, its Affiliates and their respective directors, officers, employees and agents and their respective heirs and assigns harmless from any third party claims for bodily injury, death or tangible property damage, including reasonable attorney’s fees, arising as a result of Agilent’s negligence, recklessness or wilful misconduct or arising as a result of sales of the NMR Subsystem to LipoScience provided that any indemnification by Agilent shall be diminished in proportion to the amount of negligence attributed to LipoScience or attributed to a user of the Vantera Analyzer. Other than [ * * * ], for which there is [ * * * ].

The Company is in discussions with one customer for which certain IT services had been performed. There is a dispute regarding the IT services performed. The contract with the customer contains a limitation of liability clause that limits the Company’s liability to the amount of the holdback the customer has retained amounting to approximately $0.3M. The Company believes it has meritorious defenses against any claim of liability and will vigorously defend any such claim if raised. The Company does not believe this matter will have a material impact on the consolidated financial statements.

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