Consequential Damage Disclaimers in Supply Agreements

What is a consequential damage?

This is the million (sometimes multimillion) dollar question.  According to Black’s Law Dictionary, consequential damages are “losses that do not flow directly and immediately from an injurious act but that result indirectly from the act.”[1]

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Managing Warranty, Regulatory, and Commercial Litigation Risks

Elevated warranty expenses for Original Equipment Manufacturers (OEMs) are expected to continue in 2018, and automotive suppliers can expect to continue paying a greater per-vehicle share of these expenses. Because OEM purchase orders and corresponding terms and conditions contain highly OEM-favorable language, exceptions and limitations to supplier warranties are difficult to negotiate.

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The Automotive Sector Faces Sharply Increased Duties, Pricing Uncertainty Following Announcement of Section 232 Tariffs on Steel and Aluminum

On March 1st, the automotive sectors that consume steel and aluminum were confronted with a potentially large tariff rate increase. The section 232 measures are intended to raise the prices of all steel products – whether imported or domestic – and thus will have an impact on any major purchaser of steel, which includes most automotive companies. Further, many of the parts and components that the OEMs purchase are made from domestic- and foreign-sourced steel and aluminum parts, meaning that the announcement will have a ripple effect on the entire automotive sector.

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Protecting Your Supply Chain in the Face of Potential Auto Industry Challenges in 2018

As the economy has improved and unemployment has fallen in the nearly 10 years since the Great Recession, North American vehicle sales volumes have also steadily increased and the forecast remains strong for 2018. Bloomberg estimates that approximately 16.7 million vehicles will be sold in 2018, with the majority being light trucks and sport utility vehicle.

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NHTSA and Motor Vehicle Safety



The closing years of the Obama administration saw a whirlwind of regulatory activity from NHTSA, including multiple consent orders, record penalties, and soaring recall numbers. The more aggressive enforcement posture, hailed as the “New Normal,” has largely remained in place as the Trump administration has been slow to bring in new political leadership to the agency. Although the Trump administration’s regulatory philosophy is still unclear, the future direction of the agency is beginning to come into focus as the new year gets underway. NHTSA is significantly boosting its investigative staff and implementing structural changes in its enforcement office, changes that are almost certain to lead to more defect investigations. The agency also recently revised its autonomous vehicle policy, setting forth twelve “Priority Safety Design Elements” for automated vehicles. This year, the industry expects to see passage of autonomous vehicle legislation, which has bipartisan support in both the Senate and the House. Passage of such legislation will inevitably trigger a flurry of activity at the agency as it races to meet congressionally mandated rulemaking deadlines. Thus, we expect 2018 to be another busy year for NHTSA and the industry.

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