Reference no: EM131659883

Question: Case Problem with Sample Answer. Eaton Corp. bought four air-conditioning units from Trane Co., an operating division of American Standard, Inc., in 1998. The contract stated in part, "NEITHER PARTY SHALL BE LIABLE FOR . . . CONSEQUENTIAL DAMAGES." Trane was responsible for servicing the units. During the last ten days of March 2003, Trane's employees serviced and inspected the units, changed the filters and belts, and made a material list for repairs. On April 3, a fire occurred at Eaton's facility, extensively damaging the units and the facility, although no one was hurt. Alleging that the fire started in the electric motor of one of the units, and that Trane's faulty servicing of the units caused the fire, Eaton filed a suit in a federal district court against Trane. Eaton asserted breach of contract, among other claims, seeking conse quential damages. Trane filed a motion for summary judgment, based on the limitation-of-remedies clause. What are consequential damages? Can these be limited in some circumstances? Is the clause valid in this case? Explain.