Indirect Damage

Indirect damage is a term that often occurs in contracts. In particular in the sense of a limitation of liability: “The Supplier is not liable for indirect damage suffered by the customer“. Sometimes the term “consequential damage” is used instead of indirect damage.

Unclear Term

However, it is unclear what exactly is meant by indirect damage. After all, indirect damage is not a fixed-term in Dutch law. It can be imagined that direct damage is the damage that is the direct result of an error made and that the indirect or consequential damage is further removed from the error. But how far and what exactly falls under this is not clear.

State explicitly

If a limitation of liability refers to indirect damage, it is advisable to explicitly cover what should be included below. Another possibility to remove the ambiguity is to avoid the term indirect damage (or consequential damage) in its entirety.

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