The term “consequential loss” is rarely used in contractual exclusion of liability clauses because, if included, the relevant provision may be deemed null and void by Mexican courts. The Code and Mexican jurisprudence establish that damages must be a direct and immediate consequence of the breach; any other type of clause regarding indirect loss is unlikely to be enforced by judges and therefore serves little purpose in contractual arrangements.
More commonly, “damages” is widely used either to explicitly state that damages will apply, or to exclude damages as judicial recourse for a breach of contract.
It is common practice in Mexico to explicitly include in contractual agreements that damages will be awarded to an innocent party for any breach of contract. In some instances, the contract will provide for specific heads of loss that will give rise to damages. Therefore, the principle of “consequential loss” (or “special loss”) is not used in standard form contractual agreements.
It is possible for parties to add an exclusion clause stipulating that there will be no damages awarded for the breach of contract. Contracts can also stipulate that certain specific damages will not be awarded in the event of breach of contract.
In the energy sector, there are various template contracts (in force as of January 2019) issued by regulatory bodies which include general provisions on damages and provide for exclusion of damages.
Oil & Gas Industry
Example 1 – Production Sharing Contract with the National Hydrocarbons Commission
"1) Failure to comply with their obligations under this Contract, in the event that in such cases there is a contractual penalty , the amount of damages and/or losses shall be limited to the amount of the contractual penalty concerned."
Example 2 – Licence Agreement with the National Hydrocarbons Commission
"1) …the Contractor shall pay to the Nation, through the Fund, the corresponding contractual penalties or, if applicable, the losses and damages that the Nation incurs as a DIRECT OR PROXIMATE result of the noncompliance…"
Example 3 – LNG Purchase Contract with PEMEX
"The damages caused by either party to the other or to third parties as a result of negligence, wilful deceit or bad faith will be the responsibility of the party at fault… Under no circumstances shall the parties be liable for indirect damages of any nature, punitive damages or consequential damages that are not proximate/immediate."
Example – Electricity Transmission Management Contract
“Unless otherwise expressly stated elsewhere in this Contract, the Parties shall only be liable for Direct Damages, so that any other damage shall be, if applicable, the responsibility of the party which caused the damage.”