By Jeffrey T. Donner, Esq.

Commercial contracts often contain limitation-of-liability language that parties treat as boilerplate. But in litigation, that “boilerplate” can become the most important language in the contract.

The Fourth District Court of Appeal’s decision in Chetu, Inc. v. CA Short Company a/k/a Casco International, Inc., No. 4D2024-2977, is a useful reminder that Florida courts may enforce contractual limitations on damages exactly as written — even after one party proves breach and wins at trial.

The Dispute: A Failed Software Development Relationship

Chetu and CA Short entered into a contract under which Chetu agreed to provide software maintenance and development services for CA Short’s business platform. The contract allowed either party to terminate the agreement for any reason with two weeks’ notice. It also contained a broad limitation-of-liability provision.

That provision stated that neither party would be liable to the other for “incidental, special, indirect, reliance, punitive or consequential damages,” including lost data, lost revenue, or lost profits.

The relationship deteriorated after CA Short became concerned about the lack of functionality and bugs in the platform. CA Short withheld payment on an invoice while the parties attempted to discuss the problems. Chetu responded that if the invoice was not paid by the close of business that day, it would terminate the project and reassign the project team. Chetu then did exactly that.

The Trial Court Awarded Cost-to-Complete Damages

After Chetu stopped work, CA Short completed the migration project using a combination of its own in-house programmers and outside contractors. CA Short paid $95,505.42 to outside contractors to complete the work.

Chetu sued CA Short for breach of contract and unjust enrichment. CA Short counterclaimed for breach of contract, breach of warranty, and unjust enrichment. After a three-day nonjury trial, the trial court ruled in CA Short’s favor and entered judgment for $111,697.42.

That judgment included two categories of damages: $16,192.00 for deposits improperly retained by Chetu, and $95,505.42 for the cost to complete the project using outside contractors.

The Fourth DCA Enforced the Damages Limitation

The Fourth DCA affirmed most of the trial court’s ruling. But it reversed the $95,505.42 award for the cost to complete the project.

The reason was simple: the parties’ contract barred consequential damages.

The Fourth DCA relied on the basic Florida rule that contracting parties are generally free to allocate risk and limit remedies in their agreement. The court cited Florida cases recognizing that parties may contractually limit damages recoverable for breach.

CA Short did not dispute that the cost-to-complete award constituted consequential damages. Instead, CA Short argued that the waiver was not sufficiently conspicuous to put CA Short on notice.

The Fourth DCA rejected that argument.

The Clause Was Clear Enough and Conspicuous Enough

The court emphasized several facts. The contract was only five pages long. The limitation appeared in a stand-alone provision. The provision followed an underlined heading titled “Limitation of Liability.” The parties were sophisticated commercial entities.

Under those circumstances, the Fourth DCA concluded that the waiver was sufficiently conspicuous and enforceable. The court therefore reversed the portion of the judgment awarding CA Short $95,505.42 in consequential damages and remanded with instructions to reduce the judgment by that amount.

Liability and Damages Are Different Questions

The practical lesson is that proving breach does not automatically mean recovering every category of loss.

A party can win on liability and still lose a major part of its damages if the contract limits the available remedies. That is what happened in Chetu. CA Short prevailed at trial, but its recovery was reduced because the damages it obtained were barred by the contract.

This distinction matters in commercial litigation. Lawyers and clients often focus first on who breached. That is understandable. But damages limitations can be just as important as liability. A strong liability case can be worth far less if the contract excludes the most valuable damages category.

Consequential-Damages Waivers Are Not Just Boilerplate

The Chetu decision is particularly important for software, technology, vendor, consulting, construction, and service-contract disputes. In those cases, the damages from a failed project often extend beyond unpaid invoices or refund claims.

A disappointed customer may seek lost profits, lost revenue, replacement vendor costs, business interruption damages, delay damages, lost productivity, or costs incurred to repair or complete the work. Depending on the contract and the damages theory, those losses may be characterized as consequential damages.

If the contract contains a valid waiver of consequential damages, those claims may be barred.

Drafting Matters

The limitation in Chetu was broad and direct. It applied “[u]nder no circumstances.” It included negligence. It barred several categories of damages, including consequential damages. It appeared in a separate limitation-of-liability section.

That drafting mattered.

A limitation-of-liability clause is more likely to be enforced when it is clear, direct, and reasonably conspicuous. A short contract with a separate, labeled limitation section is easier to defend than a long contract where the limitation is buried in dense text.

Commercial parties should not treat these provisions as afterthoughts. They should ask, before signing, what damages they are giving up.

Litigation Strategy: Classify the Damages Early

For litigators, Chetu is also a reminder to analyze damages categories early in the case.

If the contract bars consequential damages, the plaintiff should be prepared to explain why its damages are direct damages, not consequential damages. The defendant, in turn, should use the limitation clause to narrow the case, shape discovery, and potentially reduce exposure before trial.

That issue should not be left until the end of the case. The classification of damages may determine the real economic value of the lawsuit.

The Bottom Line

Chetu v. CA Short reinforces a straightforward but important principle of Florida contract law: sophisticated commercial parties are generally bound by the contracts they sign.

If a contract clearly and conspicuously waives consequential damages, a court may enforce that waiver even when the result is harsh. CA Short proved enough to win at trial, but it could not recover a category of damages the contract barred.

The lesson is simple: limitation-of-liability provisions matter. They are not decoration. They are risk-allocation terms. In the right case, they can decide how much money is actually recoverable after years of litigation.