There is a clause in a Supplier's Manufacturing Contract as below
"In any case liability of Supplier as indicated in this clause, and clause for Warranty and for this GPA, shall not exceed Rs. 1.5 Million (Rupees One and Half Million only) per calendar year."
The supplier wants this clause to be edited for ensuring that there is no carry forward of liability. As in, if on 1.4.2014 the liability was Rs. 1 Million, then for the balance period it should be only Rs. 0.5 Million. Similarly, if there is no liability for current year, then there should be no carry forward of un-used liability and the maximum liability next year should be Rs. 1.5 Million only and not Rs. 3.0 Million (1.5Million of last year and 1.5Million of current year).
11 September 2014
Below are some of my suggestions, can you help in selecting the best one?
1. In any case, liability of Supplier as indicated in this clause, and clause for Warranty and for this GPA, shall not exceed Rs. 1.5Million per calendar year, with no carry-forward of unclaimed liability allowed.
2. In any case, maximum liability of Supplier as indicated in this clause, and clause for Warranty and for this GPA, shall not exceed Rs. 1.5 Million (Rupees One and Half Million only) in any calendar year.
3. In any case, liability of Supplier as indicated in this clause, and clause for Warranty and for this GPA, shall not exceed Rs. 1.5 Million (Rupees One and Half Million only) per calendar year, with maximum liability of Rs. 1.5 Million in any calendar year.
4. any case, aggregate liability of Supplier as indicated in this clause, and clause for Warranty and for this GPA, shall not exceed Rs. 1.5 Million (Rupees One and Half Million only) in any calendar year.
19 July 2024
Among the options provided, option 3 seems to be the most appropriate and clear in conveying the supplier's requirement to limit liability per calendar year without allowing carry-forward of unclaimed liability. Here’s why option 3 is a good choice:
**Option 3:** "In any case, liability of Supplier as indicated in this clause, and clause for Warranty and for this GPA, shall not exceed Rs. 1.5 Million (Rupees One and Half Million only) per calendar year, with maximum liability of Rs. 1.5 Million in any calendar year."
**Reasons for selecting Option 3:**
1. **Clarity and Precision**: Option 3 clearly states that the maximum liability of the supplier per calendar year is Rs. 1.5 Million. This ensures that there is no confusion about the annual limit.
2. **No Carry-Forward**: It implicitly addresses the concern about carry-forward of liability by specifying that the maximum liability is capped at Rs. 1.5 Million each calendar year. This means any unused portion from the current year does not accumulate or carry over to the next year.
3. **Comprehensive Coverage**: It covers all liabilities under the specified clauses (including Warranty and this GPA) within the same annual limit, providing a unified approach to managing liability.
4. **Legally Sound**: The language used is clear and legally sound, ensuring that both parties understand the limitation of liability without ambiguity.
Therefore, option 3 effectively addresses the supplier's requirement to limit liability per calendar year and prevent any carry-forward of unclaimed liability, making it the best choice among the provided options.
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