Suncap Billing: Zirkelbach's Case

In the end, DOWL was only responsible for the $50,000 it had included into the limitation of liability clause in the initial contract with Zirkelbach. Zirkelbach, because of failure to navigate a contract, ended up paying the rest of the $1,218,197 to finish the project that it had contracted through SunCap Billings. The court made the correct decision on the case, as they based their decision on previous cases that were similar in the aspects of this case. After I researched Zirkelbach, I took the time to find reviews on the company that may deter the accidental situation that the company had gotten into. According to Glassdoor, a former employee from Palmetto Florida wrote “the firm is in dire financial situation, not paying subcontractors

The two main liability limitation provisions are classified by type and scope, both being equally important. These provisions are taken very seriously and are widely enforced. Enforcing these provisions, obviously helps the company maximize its freedom in a contract, which is why these provisions are put forth in the first place. However, these provisions also serve other traits in business including allowing companies to better predict business relationships with other companies. According to Glenn West in Lessons from a Consequential Case Concerning the Consequences of Consequential Damages Waivers, “By allowing parties to bargain over the allocation of risk, freedom of contract permits individuals and businesses to allocate risks toward those most willing or able to bear them. Parties who allocate risks away from themselves thereby cap their future expected litigation and liability costs. Parties assuming the risks often receive benefits in the form of lower prices in exchange.” With this quote in mind, it is very common to cap liability. Most of the liability capped will be for the breach of services agreement. The reason for this is so the amounts paid by the counterparty for that service are limited. This seems like a very easy or general way to cut limitation; however, many agreements use liability limitation by excluding certain damages types. By excluding certain damages types, the agreement is not directed at a specific remedy or liability cap, which broadens the language of the agreement. This in turn leads contracts including consequential damages to be part of the provision. The reason that consequential damages is used so much is because it is a very broad category and can be interpreted in a variety of ways. There is a large list of damages that can fall under consequential damages, making the agreement powerful for any trouble that may come