This is the third installment of a nationwide survey report by SLG, which will ask the questions listed below of each of the fifty U.S. states. Here is our New York and California coverage, respectively. Next up:
I. LIMITS OF LIABILITY
Are contractual caps on direct damages enforceable in Florida?
Yes, limits of liability clauses are enforceable in Florida. Mt. Hawley Ins. Co. v. Pallet Consultants Corp., No. 06-61763-Civ (S.D. Fla. 2009). However, drafters should “clearly and unequivocally” provide their limits, considering the general “disfavor” of exculpatory provisions among Florida courts. Id.
Are provisions that exclude all consequential damages enforceable in Florida?
Yes, generally. Florida’s Uniform Commercial Code: Sales states that consequential damages may be limited or excluded altogether unless the limitation or exclusion is unconscionable. Fla. Stat. § 672.719(3). However, commercial contract drafters must note that any limitation of consequential damages for injury to a person in the case of consumer goods is prima facie unconscionable, and therefore unenforceable. Id. Still, a limitation of damages where the loss is merely commercial is not automatically unconscionable, and therefore, may be enforceable. Id.
Can remedies be limited to those expressly and exclusively provided in a contract?
Yes. As long as the remedies are expressly provided as—and therefore agreed to be—exclusive, such exclusive remedies are enforceable. Fla. Stat. § 672.719(1)(a)-(b). However, where circumstances cause an exclusive (or limited) remedy to fail of its essential purpose, such remedy may not be exclusive of other applicable statutory remedies. Fla. Stat. § 672.719(2).
Does Florida cap the amount of (a) consequential damages, or (b) punitive damages that a party may recover?
(a) No. Although, drafters should note that consequential damages are statutorily defined to include losses:
(A) stemming from needs that the seller, at the time of contracting, had reason to know of, and;
(B) that could not reasonably be prevented by cover or otherwise. Fla. Stat. § 672.715(2)(a).
Consequential damages also include losses due to injury to a person or property that are proximately caused by the seller’s breach of warranty. Fla. Stat. § 672.715(2)(b).
(b) Yes, generally. Fla. Stat. § 768.73(1)(a). Punitive damages may not exceed the greater of:
(i) three times the compensatory damages awarded to each claimant; and
(ii) $500,000. Id.
However, Florida law raises this cap where the proven wrongful conduct was:
(1) motivated solely by unreasonable financial gain; and
(2) actually known to be unreasonably dangerous, with a high likelihood of resultant injury. This knowledge may be possessed by a managing agent, director, officer, or other person responsible for making policy decisions on behalf of the defendant. Fla. Stat. § 768.73(1)(b).
Here, the punitive damages cap is the greater of:
(y) four times the compensatory damages awarded to each claimant; and
(z) $2 million. Id.
Despite the foregoing, Florida law does not cap punitive damages at all where the defendant had a specific intent to harm the claimant at the time of injury, and such harm-minded conduct succeeded in harming the claimant. Fla. Stat. § 768.73(1)(c).
Are punitive damages recoverable in contract matters? If so, when?
Yes, unless the defendant establishes, before trial, that that punitive damages have already been awarded against that defendant for the same act or course of conduct. Fla. Stat. § 768.73(1)(d)(2)(a). Still, even in these doubled-up cases, punitive damages remain available if a court determines by clear and convincing evidence that the prior punitive damages were insufficient to punish the defendant’s behavior. Fla. Stat. § 768.73(1)(d)(2)(b).
III. DISCLAIMERS/LIMITATIONS OF WARRANTY
Are disclaimers of any and all implied warranties enforceable in Florida?
Yes. But it has to be done right. To exclude or modify the implied warranty of merchantability, for example, contract language must:
(i) mention merchantability; and
(ii) be conspicuous. Fla. Stat. § 672.316(2).
To exclude or modify any implied warranty of fitness, a contractual exclusion must be conspicuous. Id. Generally, expressions like “as is” or “with all faults” successfully exclude all implied warranties. Fla. Stat. § 672.316(3)(a).
Fun fact: There is no implied warranty that cattle or hogs are free from sickness or disease—unless the seller knowingly sells the beasts diseased. Fla. Stat. § 672.316(3)(d).
IV. STATE DISPUTE RESOLUTION
May claimants sue the State of Florida for breach of contract? If so, does Florida mandate any dispute resolution procedures with the State?
Yes. While the State of Florida waived its sovereign immunity for torts in 1975, clearing the way for claimants to sue the Sunshine State for everything from personal injury to ministerial fails, Fla. Stat. § 768.28, no statutory provisions waive Florida’s sovereign immunity regarding contracts. Florida courts undertook this matter instead, and have ruled consistently that claimants may sue Florida for contract breach as long as such suits concern “express, written contracts into which the state agency has statutory authority to enter.” Pan–Am Tobacco Corp. v. Dep't of Corr., 471 So.2d 4, 6 (Fla.1984). However, “[w]hen an alleged contract is merely implied, [Florida’s] sovereign immunity protections remain in force.” City of Fort Lauderdale v. Israel, No. 4D15–1008 (FL. Dist. Ct. App. 2015).
Florida requires no particular dispute resolution procedures for contract disputes with the State.