AAA and XXX companies are both major international conglomerates.They are negotiating a contract whereby AAA will install a computer system for XXX.One clause in the contract states that AAA will not be liable for damages caused by the negligent installation of the computer system,except that AAA warrants the system and will fix any problem for a period of two years following installation.AAA completes the installation of the computer system.XXX loads extensive amounts of information on the system,but all of it is destroyed because AAA negligently installed the memory chips.AAA fixes the memory,but XXX incurred significant expenses in recreating the lost information.XXX sues for these expenses.AAA defends with the noted clause in the contract.

Question

AAA and XXX companies are both major international conglomerates.They are negotiating a contract whereby AAA will install a computer system for XXX.One clause in the contract states that AAA will not be liable for damages caused by the negligent installation of the computer system,except that AAA warrants the system and will fix any problem for a period of two years following installation.AAA completes the installation of the computer system.XXX loads extensive amounts of information on the system,but all of it is destroyed because AAA negligently installed the memory chips.AAA fixes the memory,but XXX incurred significant expenses in recreating the lost information.XXX sues for these expenses.AAA defends with the noted clause in the contract.

Quizplus · Accepted Answer

The clause in the contract specifically limits AAA's liability for damages caused by negligent installation, except for the warranty to fix problems for two years. Since AAA fixed the memory issue, the clause is likely enforceable, protecting AAA from liability for the expenses incurred by XXX.

AAA and XXX Companies Are Both Major International Conglomerates