Yes. Contracts in the energy industry include exclusion of liability clauses that seek to exclude loss for “consequential loss”, and/or more usually, “indirect loss”. Indirect damages are excluded under Brazilian law. However, loss of profit is considered a “direct damage” which is why it is often also expressly excluded.
Oil and gas industry
There is no official model form contract for oil and gas projects in Brazil. Some examples of typical clauses often included in FPSO charter agreements, offshore services contracts and other industry agreements include:
Example 1
None of the PARTIES shall be responsible before the other PARTY for indirect damages and/or loss of profit, whether totally or partially, which are the result or have any relationship with the AGREEMENT, including, without limitation, loss relating to the production, profits, advance of profit, ownership rights, mineral exploration rights, business.
However, the limitation provided for in clause 13.17 above is not applicable to the events of liability to any of the PARTIES for consequential damage and/or loss of profit caused to THIRD PARTIES.
Example 2
Notwithstanding any provision to the contrary of this AGREEMENT, the liability of the PARTIES or their affiliates shall be limited to direct damages according to the Brazilian Civil Code and applicable legislation, excluding loss of profit and indirect damages.
Example 3
Consequential Damages - Neither Party shall be liable to the other for any consequential damages whatsoever arising out of or in connection with the performance or non-performance of this Contract, and each party shall protect, defend and indemnify the other from and against all such Claims from any member of its Group as defined in Clause 14(a). “Consequential damages” shall include, but not be limited to, loss of use, loss of profits, shut-in or loss of production and cost of insurance whether direct or indirect and, whether or not foreseeable at the date of this Contract.
Example 4
Neither PARTY shall be responsible before the other for indirect damages and / or loss of profits, whole or in part, which result or is connected with this Agreement, including, but not limited to, production losses, profits losses, anticipation of profits, property rights, mineral rights or any business. This limitation shall not apply to wilful misconduct or fraudulent acts.
Example 5
Petrobras contracts include the following clause:
From the execution date of this AGREEMENT, the liability of PETROBRAS and the CONTRACTOR for losses and damage shall be limited to the direct damages according to the Brazilian Civil Code and applicable legislation, excluding loss of profits and indirect damage, and the direct damage shall be limited to US$ 20.000.000,00 (twenty million dollars) per event and consequences thereof, converted into Reais (R$) by PTAX for sale of US Dollars into national currency, published by the Central Bank of Brazil, on the last business day immediately preceding the day of the payment of such damage.
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