The courts are reluctant to allow a breaching party to rely on the protection of a limited liability clause when the breach is severe and undermines the foundation of the contract.

Question

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Courts often view severe breaches that undermine the foundation of the contract as fundamentally altering the agreement's terms, thus potentially limiting the breaching party's ability to claim protection under limited liability clauses. This is because such breaches go to the essence of the contract, and allowing a party to limit liability in these circumstances could be seen as unjust or contrary to public policy.

The Courts Are Reluctant to Allow a Breaching Party to Rely