Jetrader - Spring 2016 - 42

Legal

Don't Waive

Goodbye

By Don Mitchell, Partner, Smith, Gambrell & Russell, LLP

A

Ahh, yes, the all too familiar bold face damages waiver. Who hasn't seen some form of
the following in a lease or sale agreement?
EACH PARTY AGREES THAT NEITHER
SHALL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL, INCIDENTAL, SPECIAL
OR PUNITIVE DAMAGES IN CONNECTION
WITH A BREACH OF THIS AGREEMENT.

Sometimes these waivers run for paragraphs. They are often the subject of
negotiation, but is their meaning fully
understood? Even English law governed
agreements contain this language, despite
it having been developed to address matters unique to U.S. state contracts law.1

Before parties agree to the final drafting
of this provision, whether in a sale or lease
agreement2, they should clearly understand
what they are waiving and whether it makes
sense in the context of the commercial
transaction between them and in the context of the party giving the waiver.3
There are three main categories of recoverable damages for breach of contract:
compensatory, incidental and punitive.
Although New York common law provides
for the recovery of damages for a breach of
contract, Articles 2 and 2A of the Uniform
Commercial Code (UCC) control in the context of sale and lease contracts. These
damages can be reviewed in the context of
a typical engine purchase transaction from

42 The official publication of the International Society of Transport Aircraft Trading

Engine Seller to MRO Buyer. For this example, assume the engine will be supplied to
MRO Buyer's airline customer having an
engine overhauled at MRO Buyer's shop.
Compensatory damages (also known
as "real" or "actual" damages) compensate
claimants to place them in the same position as they were in prior to the breach.
There are two types of compensatory damages: direct (or general) damages and consequential (also known as special) damages.
Direct damages are those that arise naturally, according the usual course of things,
from the breach of the contract. They
compensate the claimant for the value of
the very performance promised. Following
the example, this could be the difference



Jetrader - Spring 2016

Table of Contents for the Digital Edition of Jetrader - Spring 2016

A Message from the President
Calendar/News
Q&A: John Leahy, Chief Operating Officer – Customers, Airbus
State of the Regions: United States
Flying High
ISTAT Events Stretch Around the Globe
The Youngest Veteran
A Labor of Love
Don’t Waive Goodbye
Changes Ahead for the IAP
Aviation History
Aircraft Appraisals
ISTAT Foundation
Advertiser.com
Advertiser Index
Jetrader - Spring 2016 - cover1
Jetrader - Spring 2016 - cover2
Jetrader - Spring 2016 - 3
Jetrader - Spring 2016 - 4
Jetrader - Spring 2016 - 5
Jetrader - Spring 2016 - 6
Jetrader - Spring 2016 - A Message from the President
Jetrader - Spring 2016 - 8
Jetrader - Spring 2016 - 9
Jetrader - Spring 2016 - Calendar/News
Jetrader - Spring 2016 - 11
Jetrader - Spring 2016 - Q&A: John Leahy, Chief Operating Officer – Customers, Airbus
Jetrader - Spring 2016 - 13
Jetrader - Spring 2016 - 14
Jetrader - Spring 2016 - 15
Jetrader - Spring 2016 - State of the Regions: United States
Jetrader - Spring 2016 - 17
Jetrader - Spring 2016 - 18
Jetrader - Spring 2016 - 19
Jetrader - Spring 2016 - Flying High
Jetrader - Spring 2016 - 21
Jetrader - Spring 2016 - 22
Jetrader - Spring 2016 - 23
Jetrader - Spring 2016 - ISTAT Events Stretch Around the Globe
Jetrader - Spring 2016 - 25
Jetrader - Spring 2016 - 26
Jetrader - Spring 2016 - 27
Jetrader - Spring 2016 - 28
Jetrader - Spring 2016 - 29
Jetrader - Spring 2016 - 30
Jetrader - Spring 2016 - 31
Jetrader - Spring 2016 - 32
Jetrader - Spring 2016 - 33
Jetrader - Spring 2016 - 34
Jetrader - Spring 2016 - 35
Jetrader - Spring 2016 - 36
Jetrader - Spring 2016 - 37
Jetrader - Spring 2016 - The Youngest Veteran
Jetrader - Spring 2016 - 39
Jetrader - Spring 2016 - 40
Jetrader - Spring 2016 - A Labor of Love
Jetrader - Spring 2016 - Don’t Waive Goodbye
Jetrader - Spring 2016 - 43
Jetrader - Spring 2016 - 44
Jetrader - Spring 2016 - Changes Ahead for the IAP
Jetrader - Spring 2016 - Aviation History
Jetrader - Spring 2016 - 47
Jetrader - Spring 2016 - 48
Jetrader - Spring 2016 - 49
Jetrader - Spring 2016 - 50
Jetrader - Spring 2016 - 51
Jetrader - Spring 2016 - 52
Jetrader - Spring 2016 - Aircraft Appraisals
Jetrader - Spring 2016 - 54
Jetrader - Spring 2016 - 55
Jetrader - Spring 2016 - ISTAT Foundation
Jetrader - Spring 2016 - 57
Jetrader - Spring 2016 - 58
Jetrader - Spring 2016 - 59
Jetrader - Spring 2016 - 60
Jetrader - Spring 2016 - Advertiser Index
Jetrader - Spring 2016 - 62
Jetrader - Spring 2016 - cover3
Jetrader - Spring 2016 - cover4
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