Opinion ID: 4276627
Heading Depth: 2
Heading Rank: 3

Heading: Damages Limitation

Text: On cross-appeal Altech asserts the district court erred by not enforcing a contractual limitation on incidental damages. Because the damage limitation, if enforceable, would foreclose Steel’s recovery of attorneys’ fees, we address it before discussing the fees. Section 75-2-719 allows for the limitation of damages. MISS. CODE ANN. §§ 75-2-719(1–4). But at the same time, “[w]here circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this code.” MISS. CODE ANN. §§ 75-2-719(2). As the comment to section 75-2-719 explains, “[W]here an apparently fair and reasonable clause because of circumstances fails in its purpose or operates to deprive either party of the substantial value of the bargain, it must give way to the general remedy provisions in this Article.” MISS. CODE. ANN § 75-2-719 cmt. 1. In turn, the Supreme Court of Mississippi has declined to enforce a damage limitation when an exclusive repair or replace warranty fails of its essential purpose. Massey-Ferguson, Inc. v. Evans, 406 So. 2d 15, 19 (Miss. 1981) (“[S]uch limitation of damages as allowed under section 75-2-719 presupposes that the warrantor has fulfilled his warranty.”). 3 3 Both parties point to contrasting cases applying same or similar provisions from other states. See Reynolds Metal Co. v. Westinghouse Elec. Corp., 758 F.2d 1073 (5th. Cir. 1985) (applying Texas law); Riley v. Ford Motor Co., 442 F. 2d 670 (5th Cir. 1971) (applying Alabama law). Because Massey-Ferguson interprets Mississippi law, it controls. See also Royal Lincoln-Mercury Sales, Inc. v. Wallace, 415 So. 2d 1024, 1028 (Miss. 1982) (“Such 6 Case: 17-60298 Document: 00514478140 Page: 7 Date Filed: 05/18/2018 No. 17-60298 Here, Altech provided an exclusive repair or replace warranty. The warranty failed of its essential purpose when Altech—over the course of years—was continually unable to repair the CEMS. Thus, the district court did not err in holding the limitation on consequential and incidental damages also failed. See Massey-Ferguson, 406 So. 2d at 19–20 (affirming recovery of consequential damages despite contractual exclusion).