A contract included a limitation on the size of compensation that a party may claim for. One of the parties suffered significant damage and claimed it from the other party, however the other party argued that any compensation will be limited as per the agreement.
The Court stroke-off the limitation clause and held that limitation clauses will in some cases be deemed to be against the freedom of contract, especially where such completely limit the compensation or comprise a complete denial of a particular type of remedy. Courts will usually apply a narrowing interpretation of such clauses. In cases of severe damage caused due to negligence a Court will tend not to apply such a clause.