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  • Intellectual property framework

    Overview

    Intellectual property is a right protected by the Constitution of the Republic of Angola. The fundamental intellectual property framework in Angola is provided in 2 main acts: the Legal Regime for the Protection of Copyright and Related Rights and the Industrial Property Law.

  • Commercial contract framework

    Overview

    Angolan law lays down a general principle of contractual freedom, which means that parties are mostly free to establish the terms and conditions to be observed by the contracts they enter into (exceptions are made to mandatory rules legally imposed which will depend on the specific contractual relationship) and are entitled to enter into contracts provided for in the law, but also into contracts that are not provided for in the law.

    Angolan law does not establish a unitary act or set of rules applicable to all commercial contracts. Depending on the specific contractual relationship, commercial contracts may be subject to the provisions of the Civil Code, Commercial Code, Copyright and Related Rights Law, and the Industrial Property Law as well as other specific legislation.

    The aforementioned set of rules changes according to the specific contract in question.

  • Copyrights

    Nature of right

    Copyright covers original literary, scientific and artistic intellectual creations, or works. Registration is not required for the acquisition or maintenance of copyright rights; however, there are certain specific copyright-related acts subject to registration in order to be valid.

    In Angola, copyright comprises economic and moral rights.

    In the scope of economic rights, copyright owners have the exclusive right to use, enjoy and dispose of their work, or to authorize the use of the work, wholly or in part, by third parties.

    Moral rights consist in the right to claim authorship of the work, as well as the right to ensure its genuineness and integrity.

    Legal framework

    Copyrights are governed by Law No. 15/14 of July 31, which introduced the Legal Regime for the Protection of Copyright and Related Rights.

    Duration of right

    As general rule, moral copyrights are unlimited in time and, therefore, are inalienable and imprescriptible. With respect to economic copyrights, copyright protection lasts for a term of 70 years, counted as of January 1 of the first year after the death of the author, as well as through the life of the author.

    In the case of works in collaboration, copyright expires 70 years after the death of the last surviving author. As per collective works or works originally assigned to a corporate person, copyright expires 70 years from the date of the first licit publication or disclosure, except if the individuals who create it were identified in the version of the work available to the public.

    For an anonymous work, or work that was legally published or disclosed without identifying the respective author, protection is for 70 years after publication or disclosure.

    Please note that, with respect to applied arts and photographic works, economic copyrights protection lasts for a term of 45 years, counted as of January 1 of the first year after the death of the author.

    Economic copyrights related to a broadcaster last up to 35th calendar year after the broadcast.

    Ownership / licenses

    Moral rights are inalienable.

    The copyright owner, as well as their successors or assignees, may authorize the use of the work by third parties or assign economic rights, wholly or partially.

    Granting an authorization to third parties in order for them to divulge, publish, use or explore the work does not imply the transfer of copyright rights.

    Authorization shall only be granted in writing, mandatorily including the parties involved, the title and type of the work, the rights concerned, the duration, place and price conditions.

    Please note that the assigns are only effective against third parties when registered.

    Remedies for infringement

    The copyright owner may request payment of compensation by the agent for damages and losses to repair the damage suffered as a result the infringement, as well as payment of expenses caused by that infringement, which may include legal expenses.

    The amount of the compensation is determined in accordance with the civil liability regime provided for by the Angolan Civil Code, taking into account the amount of material and moral damage suffered by the copyright owner, as well as the profit obtained by the offender.

    When it is proven that the infringing copies affect a right, the Court may order, ensuring that the penalty is proportionate to the seriousness of the offense and taking into account the legitimate interests of third parties, the destruction of those copies and their packaging or their elimination of trade channels by any other reasonable means, without compensation of any kind, in order to avoid any damage to the copyright owner.

  • Mask works / topographies

    Nature of right

    Mask works and topographies are not separately protected under Angolan law. They may be protected under patent law or by way of confidentiality.

    Legal framework

    Angolan has enacted no specific rules on protection of mask works or topographies. Although Angola is part of the WTO and has approved the TRIPS Agreement, it has not yet implemented any rules on mask works or topographies protection.

    Semiconductor technology, generally, and topographies, in particular, may be protected under the traditional intellectual property rules applicable to all types of technology, particularly patent law and the rules on confidential information. Therefore, matters such as the duration of the relevant rights, ownership and remedies depend on the type of protection used in connection with each specific mask work or topography.

    Duration of right

    Not applicable for this jurisdiction.

    Ownership / licenses

     Not applicable for this jurisdiction.

    Remedies for infringement

    Not applicable for this jurisdiction.

  • Patents

    Nature of right

    Patent rights cover new inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.

    An invention shall be considered new if it does not form part of the state of the art, which comprises everything, inside or outside the country, made available to the public by means of a written or oral description, by use, or in any other way, before the date of filling of the patent application.

    An invention shall be considered involving an inventive step if it is not obvious to a person skilled in the art.

    An invention shall be considered susceptible of industrial application if it can be made or used in any kind of industry, including agriculture, fishing and handicraft.

    A national patent confers on its owner the exclusive right to exploit the patented invention in Angolan territory.

    Legal framework

    Patents are governed by the following:

    • Chapter II, the Industrial Property Law (Articles 2 to 14)
    • Membership of the World Intellectual Property Organization (WIPO), approved by Resolution No. 9/84 of July 20
    • Paris Convention for the Protection of Industrial Property – approved by Resolution No. 22/05 of August 19
    • Cooperation Treaty patent (PCT) approved by Resolution No. 22/05 of August 19 and
    • Membership of the World Trade Organization (WTO), hence the TRIPS Agreement (Accession November 23, 1996).

    Duration of right

    Patent protection is granted up to a maximum period of 15 years from the date of filling of the patent application.

    Ownership / licenses

    Patents can be transferred in writing, by means of public deed, whether or not for financial reward.

    Patents may also be licensed in writing, wholly or partially, whether or not for financial reward, on an exclusive or non-exclusive basis.

    Transfer of ownership and licenses shall be recorded in the Angolan Institute of Industrial Property to be effective against third parties.

    Remedies for infringement

    Whenever there is violation of or justified fear that another party may cause serious and difficult-to-repair harm to an industrial property right, including patent rights, the court may, at request of the interested party, order the appropriate measures to prevent any imminent violation or to prohibit continuation of the violation.

    Whoever illegally violates the industrial property rights of another person with intent or by negligence shall be obliged to pay a compensation to the injured party for damages resulting from the violation.

    In determining the amount of compensation for losses and damages, the court shall take into account the profit obtained by the infringer and the resulting damages and lost profits suffered by the injured party. The costs borne out of protection of the right in question and the investigation and termination of the harmful conduct shall also be taken in consideration, as well as personal injury.

    Infringement of the exclusive right granted by a patent may be also punishable as crime with imprisonment up to 6 months or a fine.

  • Trademarks

    Nature of right

    A trademark is a sign that distinguishes a company's goods or services, from the goods and services provided by other companies. There are 3 types of trademarks, namely:

    • Nominative: when constituted by letter(s) or word(s)
    • Figurative: consisting of figures or images and
    • Mixed: when it includes a combination of figures and words or letters in its constitution.

    The registered trademark confers to the owner, the right to prevent third parties that do not have their consent from using in the course of trade any sign which is identical or similar to the trademark in relation to goods and/or services which are identical or similar to those for which the trademark is registered.

    Legal framework

    Trademarks are governed by the following:

    • Chapter II, the Industrial Property Law (Articles 29 to 40)
    • Membership of the World Intellectual Property Organization (WIPO), approved by Resolution No. 9/84 of July 20
    • Paris Convention for the Protection of Industrial Property – approved by Resolution No. 22/05 of August 19 and
    • Membership of the World Trade Organization (WTO), hence the TRIPS Agreement (Accession November 23, 1996).

    Angola is not a party to either the Madrid Agreement or the Madrid Protocol. As such, International Registrations (IRs) cannot be extended to Angola. Angola's accession to the Madrid Agreement and/or the Madrid Protocol is currently the subject of consultation, but the position is unlikely to change for a number of years to come.

    Duration of right

    National trademark registrations remain valid for 10 years starting from the date of filing of the application and may be indefinitely renewed for equal periods.

    Ownership / licenses

    Trademarks can be transferred in writing, wholly or partially, whether or not for financial reward. A transfer of the whole of the undertaking shall include the transfer of the trademark except where there is agreement to the contrary or circumstances clearly dictate otherwise.

    Trademarks may also be licensed in writing, wholly or partially, whether or not for financial reward, on an exclusive or non-exclusive basis.

    Transfer of ownership and licenses must be recorded in the Angolan Institute of Industrial Property to be effective against third parties.

    Remedies for infringement

    Whenever there is violation of or justified fear that another party may cause serious and difficult-to-repair harm to an industrial property right, including trademarks, the court may, at request of the interested party, order appropriate measures to prevent any imminent violation or to prohibit continuation of the violation.

    Whoever illegally violates the industrial property rights of another person with intent or by negligence shall be obliged to pay a compensation to the injured party for the damages resulting from the violation.

    In determining the amount of compensation for losses and damages, the court shall take into account the profit obtained by the infringer and the resulting damages and lost profits suffered by the injured party. The costs borne out of protection of the right in question and the investigation and termination of the harmful conduct shall also be taken in consideration, as well as personal injury.

    Trademark infringement is punishable as crime with imprisonment up to 3 months or a fine.

  • Trade secrets

    Nature of right

    Trade secrets are not protected as property in Angola. However, the Angolan Industrial Property Law, in the chapter related to Crimes of Unfair Competition, characterizes as crimes certain conducts involving the unauthorized use of trade secrets. As a result, there is legal protection against the violation of trade secrets.

    Legal framework

    Trade secrets are addressed in article 73 of the Angolan Industrial Property Law.

    Duration of right

    Not applicable for this jurisdiction.

    Ownership / licenses

    Not applicable for this jurisdiction.

    Remedies for infringement

    Remedies available for infringement of trade secrets can include criminal remedies (imprisonment and monetary fine) and civil remedies (injunction to prevent the continuation of infringements and damages).

    Trade secret violation is punishable with a fine, if a more serious sanction does not apply by applying the provisions of the penal code and Law No. 9/89 (Law on Crimes Against the Economy).

  • Other key IP rights

    Nature of right

    Design

    Industrial design means any new arrangement or set of lines or colors that, for industrial or commercial purposes, can be applied to the ornamentation of a product by any manual, mechanical, chemical, simple or combined process.

    The registered design confers to the owner the right to prevent third parties that do not have their consent from using it. The aforementioned use shall cover, in particular, the making, offering, putting on the market, importing, exporting or using of a product in which the design is incorporated or to which it is applied, or stocking such a product for those purposes.

    Industrial designs

    Industrial designs

    Legal framework

    Design

    Designs are governed by Chapter III of the Industrial Property Law (Articles 15 to 28).

    Duration of right

    Design

    Designs registrations remain valid for 5 years starting from the date of filing of the application and may be renewed for 2 consecutive times of 5 years each.

    Ownership / licenses

    Design

    Designs may be licensed in writing, wholly or partially, whether or not for financial reward, on an exclusive or non-exclusive basis.

    Transfer of ownership and licenses must be recorded in the Angolan Institute of Industrial Property to be effective against third parties.

    Remedies for infringement

    Design

    Whenever there is violation of or justified fear that another party may cause serious and difficult-to-repair harm to an industrial property right, including designs, the court may, at request of the interested party, order appropriate measures to prevent any imminent violation or to prohibit continuation of the violation.

    Whoever illegally violates the industrial property rights of another person with intent or by negligence shall be obliged to pay a compensation to the injured party for the damages resulting from the violation.

    In determining the amount of compensation for losses and damages, the court shall take into account the profit obtained by the infringer and the resulting damages and lost profits suffered by the injured party. The costs borne out of protection of the right in question and the investigation and termination of the harmful conduct shall also be taken in consideration, as well as personal injury.

    Infringement of the exclusive right granted by a registered design may be punishable with a fine.

  • Intellectual property in employment context

    Employees

    As a general rule, the copyright over a work made under a labor agreement or in compliance with functional obligations is determined by agreement between the parties. In case no agreement exists, it is presumed that the ownership over the work belongs to the respective intellectual creator. In cases where there is a service provision contract, the property rights over the work are transferred to the contractor or entity represented by it.

    The right to patent shall belong to the inventor or their successors in title. Notwithstanding, if an invention was made during the performance of an employment contract in which inventive activity is provided for, the right to the patent belongs to the employer.

    Consultants / contractors

    In principle, consultants and contractors will retain ownership of the intellectual property developed by them, unless otherwise agreed by the parties or provided for in the law.

  • Key commercial contract considerations

    Registration of commercial agreements

    There are no general registration requirements for commercial contracts under Angolan law; however, certain exceptions may arise. Furthermore, Industrial Property Rights licenses are subject to registration within the Angolan Industrial Property Institute (IAPI) in order to be enforceable against third parties.

    Recognized language of commercial agreements

    There are no general requirements under Angolan law that provide that contracts must be written in Portuguese. However, in certain cases – for instance, contracts with consumers – the Portuguese language is mandatory, and, if the contract is to be used in specific situations – for example, for purposes of evidence in court or used with public authorities – translation to Portuguese is required.

    Country-specific issues for online content

    Electronic contracts are regulated under Presidential Decree No. 202/11 of July 22.

    Enforceability of online/clickwrap/shrinkwrap terms

    Contracts may be concluded electronically, provided that it does not affect its validity or effectiveness due to the use of this medium. Please note that general contractual clauses requiring electronic conclusion of consumer contracts are prohibited.

    The provider shall make available to the recipients, before the conclusion, unambiguous minimum information including (i) the contract conclusion process, (ii) whether or not the contract is stored by the service provider and accessibility by the recipient, (iii) the language or languages in which the contract may be concluded, (iv) the technical means which the provider makes available so that errors of introduction which may be contained in the order form may be identified and corrected, (v) the contractual terms and general clauses of the contract to be concluded, (vi) the codes of conduct subscribed and information on how to consult them electronically  and (vii) the effective technical means which allows the recipient to identify and correct inserted errors.

    Governing law

    The interpretation and enforceability of contracts is a matter of governing law. The choice of law by the parties is accepted as a general principle, except when otherwise provided for by law; please, however, note that, in certain cases, there are rules of mandatory application – for instance, in the scope of contracts concluded with consumers.

  • Key commercial contract terms

    Enforceability of warranty disclaimers

    This will depend on the specific warranty. Notwithstanding, the law may provide some restrictions on the enforceability of warranty disclaimers (eg, for reasons of consumer protection).

    Enforceability of exclusions/limitations of liability indemnification

    As general rule, the enforceability of exclusions or limitation of liability is limited under Angolan law. According to civil law, limitation of liability or exclusion of liability concerns the grounds of liability itself and the damages and losses. The law is not absolutely clear when dealing with the matter; therefore, some hold the opinion that the law does not prevent clauses limiting or excluding liability for acts of mere negligence, while others suggest that all clauses of exclusion or limitation are completely null and void.

    Indemnification

    Indemnification clauses in contracts are, in principle, enforceable, but may be subject to restrictions provided for in the law. It is relatively common to stipulate in commercial agreements that the indemnifying party will indemnify and hold harmless the other party against claims of third parties related to the subject matter of the agreement.

    Electronic signatures

    According to Angolan law, a qualified electronic signature is equivalent to an autographic signature in paper documents. An electronic document shall only be deemed to be signed for purposes of evidence where it meets the requirements set by the law on electronic signature and certification.

  • Key contacts
    Murillo Costa Sanches
    Murillo Costa Sanches
    Of Counsel DLA Piper [email protected] T +351 213 583 659 View bio
    Joni Garcia
    Joni Garcia
    Associate DLA Piper ADCA Angola [email protected] T +244 926 612 525

Key commercial contract terms

Enforceability of exclusions/limitations of liability indemnification

Angola

As general rule, the enforceability of exclusions or limitation of liability is limited under Angolan law. According to civil law, limitation of liability or exclusion of liability concerns the grounds of liability itself and the damages and losses. The law is not absolutely clear when dealing with the matter; therefore, some hold the opinion that the law does not prevent clauses limiting or excluding liability for acts of mere negligence, while others suggest that all clauses of exclusion or limitation are completely null and void.

Argentina

Exclusions or limitations of liability indemnification are valid if they meet the general conditions applicable to contractual clauses. However, they may be unenforceable in the following cases: when they extend to willful violations or defaults, or to violations or defaults resulting from gross negligence; when they are imposed in adhesion or consumer contracts; or when they result in the violation or annulment of rights that may not be removed or limited contractually.

Australia

Clauses that seek to exclude certain warranties or consumer guarantees or exclude or excessively limit liability will be construed strictly against the person who seeks to rely on the clause.

Clauses in standard form consumer contracts or standard form small business contracts that seek to limit or exclude liability are at risk of being considered unfair, and therefore void and subject to penalties, under the unfair contract terms regime in the ACL. As of November 10, 2023, it will not be permitted to use or rely on an unfair contract term in a consumer or small business standard form contract. A court will also be able to impose serious financial penalties where businesses or individuals violate these laws.  For example, a court has the ability to impose a fine equal to the greater of (i) AUD50 million; (ii) (3x the value of the benefit obtained and that is reasonably attributable to the breach, if that can be determined; or (iii) if the value of the benefit cannot be determined, 30 percent of the adjusted turnover during the breach turnover period (ie, over the period that the breach occurred, with a minimum of 12 months) – or, for an individual, AUD2,500,000 per violation.  Businesses must also be aware that as of November 10, 2023, the definition of ‘small business’ (for the purpose of the Unfair Contract Regime in the ACL) was changed from a business that employs fewer than 20 people to one that has fewer than 100 employees or less than AUD10 million in annual turnover in the previous income year. 

Consumer contracts cannot exclude or limit certain consumer guarantees provided under the ACL or limit or exclude liability for breach of them. Any clause that seeks to do this will be unenforceable, and such conduct could be considered misleading or deceptive and lead to legal action being taken against a person who included such clause in a contract or statement to a consumer.

Austria

Exclusion or limitation of liability is permissible in principle for damages caused by slight negligence; they are not permissible for willful misconduct. Limitations or exclusion of liability for gross negligence are not permissible in business-to-consumer contracts and exclusion for slight negligence is only possible to a certain extent and are explicitly excluded in certain cases.

Furthermore, any limitation of liability should be assessed as to whether or not it is contra bonos mores in the specific case.

Exclusion or limitation of liability for death and injury is not permissible.

The same principles apply for caps on direct damages (ie, a cap is considered as a limitation of liability and to be treated under the same principles).

Exclusion or limitation of liability for indirect or consequential damages is to a certain extent permissible, but these terms are not fully defined under Austrian law and a precise description of excluded damages is recommended.

Belgium

Limitations of product liability for defects are severely restricted under Belgian law. Aside from product liability, liability in general may be excluded in principle, subject to certain conditions. For instance, liability may not be excluded if such would lead to a complete elimination of the main obligations of the agreement, or would lead to limiting one's liability for fraud, willful misconduct, death or personal injury. Since the entry into force of the provisions regarding business-to-business agreements of the law of April 4, 2019, excluding one’s liability for gross negligence is also prohibited.

Brazil

The validity of the limitation or exclusion of liability clauses, as well as the establishing of a cap, are controversial in Brazil. The prevailing view is that such clauses are valid and enforceable, provided that they do not involve matters of public order or consumers' rights (especially in adhesion agreements), but that they would not apply in cases where the party has acted with willful misconduct or gross fault. The clauses may also be challenged in court, for instance, when the value of the indemnification agreed is not commensurate with the actual damage suffered or when the liability was an important element arising out of the nature of the transaction.

Nevertheless, even with the risk of being challenged, it is normal (and many times recommendable) to include limitations (eg, caps) and exclude certain liabilities, especially indirect damages (including loss of profit).

Canada

Exclusion or limitation of liability clauses are enforced based on contract principles applicable in the province in question. Courts, as a rule, will enforce such clauses in contracts that parties have negotiated, although they are frequently strictly construed. However, standard principles such as inequality of bargaining power (particularly in the case of consumer transactions), ambiguity or manifest unfairness of the clause may make such a clause unenforceable in a particular case. In some provinces, consumer protection legislation limits the ability to effectively limit liability.

Chile

Exclusions and limitations on liability are usually enforced. Exclusions of liability for willful misconduct or gross negligence, for the lack of essential contractual obligations or for personal injury are not enforceable.

Absolute exclusions and limitations of liability against consumers are not allowed.

China

The following liability exclusion clauses in a contract are invalid:

  • Causing personal injury to the other party;
  • Causing property losses to the other party due to intention or gross negligence.

The parties to a contract are allowed to set either generally applicable or circumstance specific liability caps.

The parties are also allowed to agree on liquidated damages. If the agreed liquidated damages are lower or significantly higher (usually more than 30 percent) than the actual loss, the courts may support a party’s request to adjust the amount of compensation based on the actual loss.

Colombia

Parties shall establish the extent and scope of rights granted and limitations of liability. Even though such limitations are usually recognized, limitations and exclusions of liability for gross negligence, fraud or bad faith are not enforceable.

Czech Republic

The liability can be excluded or limited, with consent of both parties. This does not apply in respect of liability for damages caused willfully or in gross negligence, liability for interference in natural rights of a human individual (eg, life, health and general personality right) or liability incurred by a weaker party, such as a consumer. None of these can be limited or waived in advance.

Denmark

Exclusions and limitations on liability may be enforced, provided that they are fair and clear. In addition, they should often be well reasoned. In case of gross negligence and intent, exclusions and limitations on liability are usually not enforceable. Further, the Product Liability Act (LBKG 261 2007-03-20) cannot be deviated from by prior agreement to the detriment of the injured party or the party subrogated to the injured party's claim.

In agreements with consumers, limitations and exclusions are, in most cases, contrary to mandatory provisions.

Finland

In B2B relationships, exclusions and limitations of liability are common and enforceable. However, exclusions and limitations of liability do not apply if the breach or damage results from gross negligence or willful misconduct. Highly biased and unconscionable exclusions and limitations of liability provisions can be either amended into a more reasonable form or nullified under Section 36 of the Contracts Act. This section is, however, very rarely applied to B2B contracts.

In the B2C context, several limitations apply to enforceability of exclusions and limitations of liability due to consumer protection legislation.

France

Exclusions or limitations of liability between businesses for breach of contract are both enforceable and common. Liability for gross negligence or willful misconduct cannot, however, be excluded. It is not uncommon to contractually cap one's liability, for example, to the total aggregate amount paid during a certain period in application of a given contract.

French law only makes a distinction between direct and indirect losses. Direct losses are those that are direct, foreseeable and caused by the act or breach concerned. Indirect losses are those that are not foreseeable but are linked to the act that has generated the loss (such as loss of data, revenue and goodwill). On occasion, courts consider that lost revenues were foreseeable and therefore constitute direct losses.

Tort liability cannot be limited or excluded under French law.

Exclusions or limitations of liability towards consumers are generally unenforceable under French law.

Germany

As a general rule, limitations on liability can be enforced to a broad extent if negotiated individually (unless damages are due to willful intent). The ability to validly limit liability in general terms in conditions is, however, very restricted (B2C and B2B).

Damage claims under (unrestricted) statutory law generally include indirect and even unforeseeable damages. Thus, it is – at least in individually negotiated contracts – quite usual to agree on a liability cap for slight and gross negligence. Claims directly based on the specific Product Liability Act ( Produkthaftungsgesetz) cannot be excluded or restricted.

Hong Kong, SAR

The enforceability of exclusions and limitations on liability is subject to the reasonableness test. The court will enforce such clauses if it is fair and reasonable in the circumstances. The relevant considerations include the strength of the bargaining positions of the parties, whether the buyer received an inducement to agree to the term or if it had an opportunity of entering into a similar contract without such similar term with others, whether the buyer knew or ought to have known of the existence and extent of the term, and whether it was reasonable at the time of contract to expect that compliance with the condition would be practicable.

However, exclusions and limitations of liability for (i) death or personal injury resulting from negligence or (ii) fraud or fraudulent misrepresentation are not enforceable in either business or consumer contracts.

As mentioned above, exclusions and limitations of liability for breach of the implied terms and conditions under the Sale of Goods Ordinance or Supply of Services (Implied Terms) Ordinance are not enforceable against consumers.

Hungary

Any contractual term limiting or excluding liability for deliberate non-performance of an obligation or for non-performance resulting in loss of life, or harm to physical integrity or health, shall be null and void, so such terms are not enforceable.

India

The law relating to damages in contracts is contained under Sections 73, 74 and 75 of the Contract Act. Theory of damages in India rests on the concept of "restitution" – that is, the sum of money awarded as compensation should be such as to put the injured party in the same position as they would have been if they had not sustained the loss or damage for which they are receiving damages.

Section 73 of the Contract Act prescribes that damages for breach of contract should either be such:

  • As may fairly and reasonably be considered as arising naturally, according to the usual course of things, from such breach itself or
  • As may reasonably be or was supposed to have been in the contemplation of the parties at the time they made the contract, as the probable result of the breach.

Therefore, damages are not awarded for remote, indirect and consequential losses.

The concept of liquidated damages also finds its way into the Contract Act. It permits parties to determine, in advance, the amount of compensation to be paid on account of loss or damage caused by breach of contract. However, in this case as well, the discretion would lie with the court to determine the reasonable compensation that may be awarded for the breach and, if the amount mentioned in the contract is either unconscionable or disproportionate to the value of the performance promised or consideration paid, the sum fixed would be deemed to be a penalty, which is not enforceable under Indian law. Additionally, the sum prescribed under contract acts as a cap on the amount of damages that may be awarded, such that, even where the reasonable damages is in fact greater than the sum prescribed under the contract, the court would only limit the damages to the amount mentioned in the contract.

Indonesia

Express exclusion/limitation of liability is recognized and generally respected.

Ireland

Generally, liability can be subject to limitation (in the form of a financial cap) and exclusions (of certain heads of loss) in both consumer (subject to the fair and reasonableness requirements referred to above) and in business contracts. Exclusions of liability for fraud or death and personal injury caused by negligence and for certain implied warranties will not be enforceable in a consumer contract. Current Irish case law indicates that it may not be possible to exclude liability for a fundamental breach.

Israel

Under Israeli law, parties are free to enter into an agreement which sets out exclusion or limitation of liability of one party (such exemption from liability will only bind the parties which agreed to it), except with respect to bodily injury or death which cannot be contractually stipulated or if such exclusion or limitation of liability is of a supplier in a standard contract (and thus such exclusion or limitation might be regarded as an unfairly prejudicial term contained within a standard contract) or in exceptional cases where the court might intervene and cancel such a provision if it contravenes public policy or if it is considered to be morally or socially undesirable. It should be noted that, in practice, parties usually limit liability to direct damages only or restrict the maximum amount of liability.

Italy

Provisions containing limitations of liability are generally enforceable, except in the event of willful misconduct and gross negligence.

In the case of standard contracts drafted only by 1 party, limitation of liability clauses shall be approved in writing by the other party, as mentioned above.

In B2C agreements, clauses excluding or limiting the liability of the vendor in the event of death or injury to the consumer due to an action or omission of the vendor are in any case void.

Tort liability may not be excluded or limited.

Japan

Exclusions and limitations of liability are usually enforceable unless they are grossly unfair. In consumer contracts, full exclusions or partial exclusions in case of gross negligence or willful misconduct are unenforceable under the CCA.

Luxembourg

Limitations of product liability for defects are severely restricted under Luxembourg law. Aside from product liability, liability in general may be excluded in principle, subject to certain conditions. For instance, liability may not be excluded if such would lead to a complete elimination of the main obligations of the agreement or would lead to limiting one's liability for fraud, willful misconduct, death or personal injury.

Mexico

Provided that granting a warranty is not mandatory, if the seller or service provider grants warranty to its client, it shall respect such warranty in all its terms and conditions and contain the minimum requirements set forth by the applicable law.

Netherlands

In principle, a party will be liable for all damages related to an attributable breach of the contract. With some exceptions, commercial entities are largely free to agree on a limitation of liability. Limitations and exclusions – for example, with respect to consequential damages – are common to Dutch law contracts.

Liability clauses do not apply to the extent, in the given circumstances, it would be unacceptable according to standards of reasonableness and fairness. Limitations of liability set out in general terms and conditions are generally deemed unreasonable in B2C relationships. In B2B relationships within the supply chain, risk for product liability can, in general, be apportioned between the parties on an agreed basis by indemnity protection.

New Zealand

An exclusion or limitation of liability clause will generally be construed strictly against the party that drafted the clause or against the party seeking to rely on the clause where there is ambiguity, particularly where there is an imbalance of bargaining power. Clear and unambiguous language is generally required to exclude liability for negligence.

Where such a clause seeks to limit or exclude liability in relation to certain guarantees or representations in consumer contracts, these will be unenforceable.

In New Zealand, no action may be brought for personal injury covered by the Accident Compensation Act 2001 other than proceedings for exemplary damages. However, this liability may not be excluded or limited.

Nigeria

Generally, exclusion of liability clauses in Nigeria are enforceable. However, a condition precedent to enforcing an exclusion, exemption or limitation clause is that documents containing it must be tendered in evidence. Other conditions are that the clause must be incorporated in the contract, the clause must be clear and devoid of ambiguity, it must not be prohibited by a statute or a rule of law and it must be relevant.

The courts have also held that a limitation clause is a specie of the genus of an exemption clause. In the realm of contract, an exemption clause, which does not avail a party guilty of fundamental breach of contract, binds one who is aware of it. By implication, this decision renders a limitation, exclusion or exemption clause unenforceable if the party seeking to enforce it has breached a fundamental term of the contract.

The court would also not enforce an exemption clause which seeks to exclude liability for negligent execution of a contract.

Norway

Exclusions and limitations on liability are usually enforced unless they are unconscionable, unclear or not conspicuous. Exclusions of liability in cases of gross negligence or willful misconduct and for contractual terms which inappropriately exclude or limit the legal rights in the event of total or partial non-performance are presumed to be unfair. However, there is little case law established on this point.

Peru

N/A

Philippines

Sellers, in their contracts for the sale of goods and services, may exclude indirect damages (including consequential, incidental and special damages).

A cap on direct damages or aggregate liability is also common. Parties to a contract may agree on liquidated damages that must be paid in the event of breach, but such may be equitably reduced by the courts if found as unconscionable.

Exclusions and limitations on liability are usually enforced unless they are contrary to law, morals, public policy or good customs, or unconscionable, unclear or not conspicuous.  For a waiver of liability to be valid, it must be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to that person.  Exclusions of liability for fraud, personal injury, death and, in some states, bad faith, willful injury or unlawful conduct, are not enforceable. Some states allow exclusions of liability for gross negligence if "gross negligence" is specified in the contract.

A provision to renounce in advance the recovery of punitive (exemplary) damages is considered void.

Poland

The parties to a contract who are professionals conducting business entity may limit the liability for negligence in full. However, it is not permitted to exclude liability for willful conduct.

There are specific laws which prohibit the exclusion or limitation of liability, the most well-known of which is the liability for hazardous products.

For contracts concluded with consumers, clauses excluding or limiting liability towards the consumer in the event of an injury to a person or the non-performance or improper performance of an obligation are considered abusive.

Also, a register of abusive clauses has been implemented in Poland. It contains examples of clauses that are considered abusive with respect to customer contracts. However, most of these clauses do not specifically refer to intellectual property issues. Nevertheless, the register should be considered with respect to other clauses included in commercial contracts referring to intellectual property.

Portugal

As general rule, the enforceability of exclusions or limitation of liability is limited under Portuguese law. According to civil law, limitation of liability or exclusion of liability concerns the grounds of liability itself and the damages and losses. The law is not absolutely clear when dealing with the matter; therefore, some hold the opinion that the law does not prevent clauses limiting or excluding liability for acts of mere negligence, while others suggest that all clauses of exclusion or limitation are completely null and void.

Romania

Sellers, in their contracts for the sale of goods under Article 1708 of the NCC, may limit their liability for hidden defects. A cap on direct damages or aggregate liability is also possible.

Russia

The liability may be limited, but not entirely excluded, by the parties only in the B2B context but, even in that case, liability for willful actions cannot be limited or excluded.

Saudi Arabia

Exclusions/limitations of liability may not be enforced in the KSA courts even if the parties to a commercial contract agree to such limitation.

Singapore

Exclusions and limitations of liability are common and generally enforceable in Singapore.

However, this is subject to the Unfair Contract Terms Act 1977. For example, section 2(1) of the Unfair Contract Terms Act 1977 provides that a person cannot exclude or restrict their liability for death of personal injury from negligence and section 3(2)(a) further provides that in a contract where one party is a consumer or is subject to the other party's written standard terms of business, the other party            cannot exclude or restrict their liability if the other party is in breach of the contract or relies on any term to render a different kind of service from that which was reasonably expected of them (or not render any service at all), except if such an exclusion or restriction satisfies the requirement of reasonableness.

Slovak Republic

Not applicable for this jurisdiction.

South Korea

Under Korean law, damage claims are made for compensation of:

  • Ordinary damages
  • Extraordinary damages

Ordinary damages are those that would normally be expected to result from a breach of contract or a particular tort. Extraordinary damages refer to all other damages than ordinary damages that arise from the special circumstances which the wrongdoer "knew" or "could have reasonably foreseen." Parties may validly agree to exclude indirect damages from compensation, limit indemnification for indirect damages, or exclude warranty liability. However, enforceability of such agreement may be restricted by:

  • Public policy and general principles of equity under the Civil Code.
  • The court invalidating a clause that exempts a breaching party from liability for intentional wrongdoing or gross negligence on the part of that party.

However, in practice, many companies provide for a damage cap despite the risk that such damage cap provision may be held unenforceable.

Spain

A cap on direct damages or aggregate liability is common.

Exclusions and limitation on liability are usually enforced unless they are unconscionable, unclear or not conspicuous. Exclusions of liability for fraud, personal injury, death, bad faith, gross negligence or willful behavior are not enforceable under Spanish law.

Exclusions and limitations of liability against consumers are generally not allowed.

Sweden

Sellers generally exclude indirect damages in their contracts for the sale of goods. A cap on direct damages or aggregate liability is also common.

Exclusions and limitations on liability are usually enforced unless they are unconscionable, unclear or not conspicuous. Exclusions of liability for personal injury, death, intent and gross negligence are not enforceable.

In consumer situations, a provision which disclaims the seller's liability in cases of personal injury or death is presumed to be unfair. The same applies to a contractual provision which disclaims all liability in cases of gross negligence and for contractual provisions which inappropriately excludes or limits the legal rights in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations.

Switzerland

Under Swiss mandatory law, it is not possible to validly exclude or limit the liability of a party for gross negligence or intentional breach of contract. In particular, the limitation of a party's liability to a certain cap and the exclusion of certain categories of damages (such as indirect or consequential losses and loss of profits) would not be valid in the event of gross negligence or intentional breach of contract. As a result, liability may only be validly excluded or limited for damages caused by a party with slight or medium negligence.

Liability for auxiliary persons may be waived entirely.

Taiwan, China

Exclusions or limitations of liability are enforceable in Taiwan, provided that liabilities arising from willful misconduct or gross negligence shall not be released in advance and in certain situations; if the exclusions or limitations of liability are obviously unfair, the aggrieved party may apply to the court for equitable adjustment of liability. Exclusions or limitations of liability toward consumers are generally unenforceable under Taiwan law.

 

Ukraine

Ukrainian legislation generally provides a possibility for the parties to an agreement to limit the amount of damages (real damages or loss of profits) to be reimbursed under the agreement. However, in certain cases, Ukrainian legislation directly prohibits contractual limitations of liability. In particular, parties cannot contractually limit the liability of the producer (seller or service provider) in case of death or injury caused to the consumer by the action or omission of such producer (seller or service provider) or liability for damages caused to consumers by the defective product. Contractual limitations of liability for deliberate breach of obligations are not allowed.

United Arab Emirates

Under UAE law, absolute exclusions of liability in contracts are null and void. Restrictions on the ability of one contracting party to recover losses arising from fault by the other contracting party are not generally enforceable in the UAE, unless this fault is the result of fraud or gross misconduct. Moreover, the UAE Courts would be reluctant to award damages for economic reasons, other than those which the claimant can prove were actually suffered as a direct result of the defendant's fault.

United Kingdom

With some notable and important exceptions, commercial entities are largely free to agree between themselves how to apportion this risk and to limit their respective liability to each other. These can take varied forms from the complete exclusion of liability for specific types of loss to requiring claims to be made within a specific time frame.

Parties cannot, however, exclude or limit liability for:

  • Certain implied warranties
  • Death or personal injury caused by their, or their employees’, negligence
  • Fraudulent misrepresentation

Other provisions seeking to exclude or limit liability (eg, certain types of actions, such as negligence, or certain losses or claims, such as wasted management time) commonly may need to pass the "reasonableness" test set out under UCTA for them to be valid and enforceable; this will, however, depend on a range of factors, including whether a supplier is contracting on its standard terms and the balance of bargaining power between the parties (in addition, please see the comments as to international supply contracts included in enforceability of warranty disclaimers).

English and Scottish contract provisions are construed Contra Proferentum (against the party that drafted them); therefore, care should be taken to ensure clarity and accurate drafting of liability clauses. Equally, where there is any ambiguity in an exclusion of liability clause, this will be interpreted against the party seeking to limit or exclude its liability, so care should be taken when drafting to avoid ambiguous terms.

Liability will continue throughout the contract and may not cease after the contract has been fulfilled, terminated or expired, subject to statute and any warranties and indemnities set out in the contract.

It is common practice for the parties to agree on the total amount which can be claimed in the event that a contract is breached and to expressly state this cap in the contract. As explained above, such a cap on liability may be subject to the reasonableness test depending on the circumstances.

United States

Sellers, in their contracts for the sale of goods under Article 2 of the UCC, customarily exclude indirect damages (including consequential, incidental and special damages).

A cap on direct damages or aggregate liability is also common.

Exclusions and limitations on liability are usually enforced unless they are unconscionable, unclear or not conspicuous. Exclusions of liability for fraud, personal injury, death and, in some states, bad faith, willful injury or unlawful conduct are not enforceable. Some states allow exclusions of liability for gross negligence if "gross negligence" is specified in the contract.

Enforceability of exclusions and limitations of liability against consumers may differ from jurisdiction to jurisdiction.

Most jurisdictions preclude recovery of punitive (ie, exemplary) damages for contract breaches without a separate and independent tort claim.

Contracts with federal and state government agencies may have statutory limits on their liability.