My last article pointed out a situation where parties conflate contractual indemnity and damages clauses.  The standard language in Dunce’s Caps’ contract provided for an indemnification of “any and all losses arising from any breach of any representation or warranty in the agreement” and capped those losses at the price of the order. When Dunce’s failed to deliver the promised 100,000 hats, Flat Backs filed an arbitration action seeking recovery of an alleged $4 million in damages, even though the purchase order price was only $500,000. Ignoring Dunce’s damages cap argument, the arbitrator Terry B.L. Judge awarded Flat Backs the full $4 million. Arguing that Judge was not permitted to award Flat Backs more than $500,000, Dunce’s appealed to the state court seeking to overturn the arbitration award because Judge exceeded his jurisdictional limits. Did Dunce’s contractual indemnification provision operate as a cap on the damages that Flat Backs could recover for Dunce’s breach of contract?
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Needing a sales boost for his new line of fashion catheters, Sy Noff, owner and President of Med, Inc., retained advertising gurus Draper & Olson. Their contract provided for signature by Sy Noff as “President and CEO” of “Med Catheter Corp, Inc.”

After a three-martini lunch, Draper & Olson run up a $100,000 bill creating an instantly iconic advertising campaign featuring the Medicorp Man, a rugged rancher who isn’t afeard to proudly use Medicorp’s “Healthy Heartland”-brand catheter whilst cow-punching on the range. Despite the instantly iconic advertising campaign, Med’s business goes down the tubes. Sy and Med stiff Draper & Olson on their $100,000 ad bill. Noticing that the ad contract was signed by Sy Noff using the wrong company name, Draper & Olson’s diligent attorneys sued Sy Noff himself for Med’s debt because he did not disclose the true legal name of the company he was signing for. But surely,” Sy says, “I cannot be held personally liable for Medicorp’s debt simply because the company name was wrong on the contract!”

First, don’t call us Shirley. Second, you bet he can.


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Ty Coon was furious after Tightwad Bank’s internal bank audit of Leaven and Earth’s books revealed the company’s inventory and accounts receivable levels materially lower than the company’s audited financial statements. Those financial statements, upon which Tightwad Bank relied, were prepared by Leaven and Earth’s outside auditors Cook, Books & Hyde and were a requirement