EXCLUSION CLAUSES AND DELIBERATE REPUDIATORY BREACH

In Internet Broadcasting Corporation v MAR LLC [2009] EWHC 844 (Ch), [2009] 2 Lloyd’s Rep 295 Gabriel Moss QC, sitting as a deputy judge of the High Court, held that an exclusion clause did not cover a deliberate, personal repudiatory breach of contract. His conclusion suggests that the courts may be more reluctant to conclude that an apparently widely drafted exclusion clause is apt to encompass certain forms of fundamental breach.

The facts

The defendant issued a notice to the claimant purporting to terminate the contract between them with immediate effect and failed to perform its obligations under the contract. The defendant did not give any reasons for its decision to terminate the contract and it accepted (eventually) that it had committed a repudiatory breach of contract. The issue between the parties was whether the exclusion clause contained in the contract between the parties operated to exempt the defendant from liability in respect of the loss of profits suffered by the claimant. The exclusion clause was drafted in the following terms: