Wednesday, October 20, 2010

Reminder That A Party Cannot Contractually Exonerate Itself For Its Own Gross Negligence

In Abacus Federal Savings v. ADT Security Services, the First Department observed that provisions in contracts that exonerate a party from its own negligence are generally enforceable. At least one exception exists, however, in that, as a matter of public policy a party may not be exonerated from liability caused by its own grossly negligent conduct. Gross negligence in the sense of contractual limitation of liability must "smack of intentional wrongdoing." BUT, a waiver of subrogation provision does constitute a defense to all claims, including claims of gross negligence.

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