Opinion ID: 675175
Heading Depth: 2
Heading Rank: 4

Heading: ICC's Disclaimer of Consequential Damages Liability

Text: 32 TCA next argues that ICC's disclaimer for consequential damages fails of its essential purpose. A seller may limit or exclude consequential damages unless the limitation is unconscionable. Minn.Stat.Ann. Sec. 336.2-719(3). 4 The U.C.C. encourages negotiated agreements in commercial transactions, including warranties and limitations. Hapka, 458 N.W.2d at 688. It is at the time of contract formation that experienced parties define the product, identify the risks, and negotiate a price of the goods that reflects the relative benefits and risks to each. Id. An exclusion of consequential damages set forth in advance in a commercial agreement between experienced business parties represents a bargained-for allocation of risk that is conscionable as a matter of law. American Computer Trust Leasing v. Jack Farrell Implement Co., 763 F.Supp. 1473, 1489 (D.Minn.1991) (American Computer ) (applying Minnesota law), aff'd and remanded, 967 F.2d 1208 (8th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 414, 121 L.Ed.2d 338 (1992). 33 In the agreement between ICC and TCA, TCA expressly agreed to an ICC disclaimer that stated in part IN NO EVENT SHALL ICC BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES SUCH AS LOSSES OF ANTICIPATED PROFIT OR OTHER ECONOMIC LOSS IN CONNECTION WITH ... THIS AGREEMENT. 34 We agree with the district court that the disclaimer of consequential damages was not unconscionable and that the damages claimed by TCA, for business interruption losses and replacement media, were consequential damages as defined by Minn.Stat.Ann. Sec. 336.2-715(2). 5 Furthermore, TCA and ICC were sophisticated business entities of relatively equal bargaining power. ICC's disclaimer was not unconscionable and TCA is therefore precluded from recovering consequential damages. American Computer, 763 F.Supp. at 1489.