Module 3 · Chapter 8

Warranties, Limitation of Liability and Indemnities

When goods fail or hurt someone, the contract decides who pays. This chapter reads the supplier’s promise about its goods, the cap on claims, the indemnity and the insurance.

≈ 9 min read 8-question test

In this chapter

  • What Cressby promises about each machine, and for how long
  • How the cap limits what each side can claim from the other
  • Why Cressby pays outsiders’ injury claims, and how insurance backs that up

8.1Who pays when a machine goes wrong, in one paragraph

Four parts of the Agreement decide who pays when a machine goes wrong. The warranty says what Cressby promises about each machine, and the cap limits claims between the two sides each year. The indemnity makes Cressby pay when a faulty machine hurts someone or harms their property. Insurance stands behind these promises, so the money is there when a claim comes.

Key point

Each loss has an owner, written down before anything goes wrong. The insurance makes sure the money is there.

Also in this chapter

  1. The warranty: what Cressby promises about each machine
  2. No reasonableness test for a supply abroad
  3. The carve-out and the cap
  4. The indemnity: claims from outsiders
  5. Insurance, and who carries which loss
  6. Your job

Preview

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