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First Principles of Business Law |
| The contents of a contract |
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4. Terms that exclude or limit liability |
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4.3. The enforceability of terms that limit liability |
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Read the facts and the question and then choose the best answer. A says to B: 'For $50,000 I will supply you with updated software for your computer system. If the software proves defective, I will rectify the faults without charge, but my liability for any financial losses that might arise will be limited to $1,000.' If B accepts these terms, will the provision limiting A's liability be enforced by the courts? |
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(a) Yes, contractual liability can be limited in extent by agreement. (b) No, contractual liability cannot be limited in its extent by agreement. |
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