This clause says that if both you and the other party were careless and caused a loss, the damages are split between you based on who was more at fault. Under UK law (the Law Reform (Contributory Negligence) Act 1945) and US law, courts already do this automatically, but this clause makes it explicit in the contract. For example, if a supplier delivers faulty goods but you also failed to inspect them properly, you might each be found 50% responsible, so you'd only recover half your losses. This clause matters because it clarifies that your own carelessness reduces what you can claim.
Accept this clause—it's fair and reflects how courts would handle the situation anyway. However, add language that says contributory negligence does not apply to certain serious breaches, like fraud, willful misconduct, or breach of core obligations (like confidentiality). This protects you from situations where the other party tries to blame you for their deliberate wrongdoing. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says that if both you and the other party were careless and caused a loss, the damages are split between you based on who was more at fault.
Why should I care about this clause?
Under UK law (the Law Reform (Contributory Negligence) Act 1945) and US law, courts already do this automatically, but this clause makes it explicit in the contract.
What are my options?
For example, if a supplier delivers faulty goods but you also failed to inspect them properly, you might each be found 50% responsible, so you'd only recover half your losses.
How does this affect small businesses?
This clause matters because it clarifies that your own carelessness reduces what you can claim.