Will the court enforce the limitation-of-liability clause

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Reference no: EM131114535

Limited Remedies. In 1968, Canal Electric Co. purchased a steam turbine generator from Westinghouse Corp. In 1983, Canal purchased some new rotating blades from Westinghouse to use in the generator. The contract covering the 1983 sale of the blades warranted that Westinghouse would repair or replace any defective parts for a one-year period and limited Westinghouse’s total liability under the contract to the purchase price of the blades, which was $40,750. Liability for incidental and consequential damages was specifically disclaimed. A few months later, the blades developed cracks, and Canal had to shut down operations for 124 days while the blades were being replaced. As a result, Canal incurred costs (which were significantly higher than the purchase price of the blades) to obtain replacement power during this period. Ultimately, Canal sued Westinghouse for breach of warranty and negligence. Westinghouse claimed that its liability to Canal was limited to the purchase price of the blades, $40,750. Will the court enforce the limitation-of-liability clause? What factors will the court consider in deciding the issue? Discuss fully. [ Canal Electric Co. v. Westinghouse Electric Corp., 756 F.Supp. 620 (D.Mass. 1991)]

Reference no: EM131114535

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