In the NetTV case (Internet Broadcasting Corporation (trading as NetTV) v MAR LLC (trading as MARHedge) [2009], the High Court provided guidance on whether exclusion clauses can apply to deliberate repudiatory breaches of contract.
The claimant (NetTV) and defendant (MARHedge) entered into a joint venture agreement where the claimant set up an internet television channel to broadcast material provided by the defendant. The agreement could not be terminated for three years other than in response to a material breach. The defendant, through its president, wrongfully terminated the agreement and sought to avoid liability by relying on an exclusion clause which provided that neither party would be liable for various types of loss, including loss of profit.
The High Court ruled that there is a rebuttable presumption that an exclusion clause should not apply to a deliberate breach of contract by a party. In this case, the exclusion clause was ineffective because it did not expressly state that it was intended to relieve the parties from liability for deliberate breach of contract.
The High Court held that very clear language would be required to persuade a court that an exclusion clause covered deliberate breach of contract. The case illustrates how important it is to make sure that exclusion clauses carefully reflect the parties' intentions. Where specific protection is sought, specific language should be used to carve out liability. If a business does want to exclude or restrict liability for deliberate breaches of contract, carefully worded express language will be required to make this effective.
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