This contract tip is about cumulative remedies provisions.
These provisions typically say that applicable remedies are available for any breach of the agreement.
That does not mean you get to recover multiple times for the same breach. But you have a choice to pursue more than one remedy as part of your claim.
Here are three core things to know about cumulative remedies:
1. Cumulative remedies are available without this language.
The default presumption in the U.S. is that all remedies are available to the parties unless they say otherwise. My understanding is that you do not need to restate that in your contract, but it doesn't hurt. I usually don’t touch it in my contract reviews.
2. Be precise if you want any remedy to be exclusive.
If you do want a remedy to be exclusive, you have to be very precise. Identifying a remedy for a breach does NOT make it exclusive. I use the words “the sole and exclusive remedy” to clarify. You could probably shorten that to just "exclusive."
3. If you have a cumulative remedy provision, don’t mess it up by not recognizing the exclusive remedies in your contract.
You can create a problem if you have an exclusive remedy AND include a cumulative remedies provision that doesn't carve out that sole remedy. That approach results in two provisions that conflict with each other.
To avoid this, ensure your cumulative remedies provision says something like, “Except for the sole and exclusive remedies identified in..." Then add the specific provision or a broader "this Agreement.”
What other things would you add to this list? Do you see many problems with these provisions in the contracts you review?
