IAI Actuarial Core Principles · Business Management · Implied terms, exclusion of liability, contractual remedies and damages

Rohan Actuarial Services, a Mumbai consultancy, sends a client a standard engagement letter that contains a clause excluding all liability for 'any loss arising from our work'. The client signs it after reading it and negotiating other terms. Under general Indian contract principles, what is the most accurate starting position on this clause?

A signed exclusion clause is generally enforceable because it forms part of the agreement. Courts nonetheless read ambiguous wording strictly against the party relying on it. Exclusions are not automatically void, and they need neither a separate payment nor prior court approval.

1. AThe clause is void because every exclusion of liability is against public policy
2. BThe clause is generally capable of binding the client, since it was part of the signed agreement, though its wording is read strictly against the party relying on itCorrect
3. CThe clause binds only if the consultancy also pays a separate fee for it
4. DThe clause binds the client only if a court first approves it
5. The clause is binding only for loss caused by deliberate acts