Posted: February 1st, 2023

Warranty Disclaimers and Limitations on Liability

Notification of Claims
The provider must immediately inspect any alleged affected seed or crop after any claim arising from the provider’s seeds. The provider must be notified immediately after discovering or should have discovered a defect or other basis for a claim by the Purchaser or User. In no event shall notice be delayed for more than thirty days from the date of finding or should have discovered the defect. The provider shall be barred from filing a claim for which notice was not received within thirty (30) days.

Limitation of Action: For the break of agreement claims and for guarantee claims the supplier, the activity should be brought inside one year of the reason for activity accumulates. Those actions will be barred after such a time.

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Severability: In the event of the unenforceability of any portion of these terms and conditions, all remaining provisions of these terms and conditions shall remain in full force and effect.

Enhanced or treated seeds: The Purchaser/User may never allow undue enhancement, treatment, or conditioning of provider’s seeds by anyone except provider, and the provider disclaims any warranty regarding the results of any such use.

Seed Repackaging: The provider disclaims all warranty obligations and all liability if seeds are removed from provider brand packaging and repacked into another container (in any manner for enhancement, treatment, resale, etc.).

Technical advice: The seeds are provided without charge to anyone who needs technical advice. The provider, therefore, disclaims any warranty and any liability arising from the use of their advice.

Governing Law: Laws of the State of Idaho shall govern and construe this Limitation of Warranty and Liability.

No Amendment: The Purchaser and User agree that the provider’ limitations on liability and warranty apply to both parties’ contracts about provider’ seeds and their warranties and liabilities. No alteration or amendment to the limitations of warranty and liability may be made, except by a provider representative in writing.

Limitation of Liability
There is often a clause that limits the amount of liability along with or within the clause that limits liability conditions. This important clause is also included in our list of limitations of liability. Clients will often include the following clause in their first draft of a Service Agreement: A contract’s liability clauses are crucial to ensuring that responsibility isn’t overblown. An important negotiating point is how much the liability cap should be. There are various points, ranging from most to least Agency-friendly, and a few general areas of negotiation that should be discussed.

Gains: A cap on agency damages maximum will make the most sense if it maximizes agency profit. Even if there are damages, you will still be able to break even on the project.

The fee: A cap of the total contract fee would be the next most favorable option for an Agency. The most common type of cap is this one. As a rule, it is typical to cap the fees over a certain length of time, such as 12 months, for longer-term contracts.

Providing insurance: Taking the damage cap to the insurance limit is the next step on the spectrum. This might not be as high as the fee, depending on the coverage limits. Alternatively, the Agency should describe the cap as representing the amount of insurance they collect. The cap is thus set accordingly if insurance does not pay or doesn’t pay anything. It is rare for a cap to be linked to insurance.

Multiple fees: An additional option would be to cap the fee at some multiple. The multiple should remain low. Additionally, the recommendation above that the cap is stated as a multiple of fees collected is also applicable here.

Cap-less: An Agency would obviously prefer this to any other option. If there’s no clause like this, the cap may not apply.

Mutually beneficial: The benefit of the clause for both the Client and Agency is completely appropriate, just as it is for limitations on the amount of liability. Limit the liability of the client to the extent specified in the agreement. Also, make sure any mutual limitation of liability clause states clearly that in addition to the limitations on liability set at fees and profits, the limitations on liability do not apply to the Agency’s ability to collect its fee.

Limitations on Limits
Clients with a high level of sophistication often request a list of carve-outs to which a liability limitation does not apply. Clients might request the following exceptions:

A duty to indemnify (in particular, an obligation to compensate for infringements);

The non-infringement of the patent was breached

Verification of violations of confidentiality obligations;

non-compliance with the client’s security and confidentiality provisions;

Exceptions like these are extremely difficult to delete from a limitation of liability clause. The clause should contain these exceptions, so it’s usually better not to offer them. It is generally the case that exceptions to mutual liability limitations benefit Clients rather than agencies. A critical part of an indemnification exemption is to ensure that the indemnification clause has been correctly negotiated, especially regarding intellectual property.

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