In the context of a commodity trading software contract, a fundamental question has arisen in this appeal as to how to apply a clause that provides for lump sum damages in the event of default if the contractor has never reached its term. X waives all present and future claims for consequential damages against Y and Y`s appointed or elected representatives, members, agents, employees, officers, directors and representatives arising out of or in connection with this Agreement, and such waiver will continue upon termination of this Agreement. This decision underlines the certainty for which English case law has proved attractive. Depreciation is the invoiced measure of damage, as it reflects the loss caused by a breach of warranty during a share sale. The rejection of hypothetical compensation means that, in future cases, claimants will have to formulate their claim for damages in accordance with the existing principle of assessment of damages. It is unlikely that the court will award a claim on an untested basis, even if a defendant has breached the warranty. This decision clarifies the interpretation of the contractual provisions relating to lump sum damages. The case shows that the three different approaches are possible options for interpreting a lump-sum indemnification clause in an agreement. This decision once again underlines the importance of the contractual agreement of the parties and the continued willingness of the court to apply lump-sum indemnification clauses in commercial contracts, unless it is a sanction.
It is therefore crucial that the parties clearly state the results to be achieved in the event of a delay in the completion of the work. A practical advantage would be to clarify that the lump-sum indemnification clause would continue to apply until the termination of the contract and no longer, or that the clause would continue to apply even after the termination of the contract until all outstanding work had been completed by a second contractor. This decision did not limit the interpretation of the lump-sum compensation clause to any of the three approaches identified and means that the parties can decide on the effects of their contract by clearly formulating such clauses. “No Damages for Delay” clauses are relatively rare in construction and engineering projects, at least outside the United States. .