Law and regulation of consequential damages clauses in the energy sector in Slovakia

1. Do the words “consequential loss” have a given meaning in law?

In Slovak law the term “consequential loss” is not explicitly regulated. This term is neither regulated by the Act No. 40/1964 Coll., Civil Code as amended (the “Civil Code”) nor by the Act No. 513/1991 Coll., Commercial Code as amended (the “Commercial Code”), which otherwise generally govern the recoverability of loss and damage in contract law. 

The following terms are used in relation to the type of damage that is recognised in Slovak law: actual damage; loss of profit; and non-material damage.

“Actual damage” is considered to be monetary damage, which consists of the reduction in value of the existing assets of the injured party and/or costs spent in order to remedy the situation or to offset the consequences resulting from it.

“Loss of profit” is understood as the loss incurred by the injured party by the loss of the reasonably expected profit gained in the ordinary course of business. Pursuant to the Commercial Code, the injured party may, in lieu of actual lost profits, claim compensation for profits made in fair business on terms similar to the terms of the breached contract within the sphere of activities in which the injured party conducts business.

“Non-material damage” is harm in the personal sphere of the injured party. The remedy does not pursue the objective of restoring or providing financial compensation to the injured party for the actual monetary or material damage, but rather constitutes a certain fair alleviation of the abstract non-monetary and non-material consequences of the harm suffered. 

2. Are the words “consequential loss” used in contractual exclusion of liability clauses?

Since the term “consequential loss” has no given meaning in Slovak law, it is also not used in contractual exclusion of liability clauses. The terms that are generally used in contract clauses are called the “exclusion of losses” or “loss of profit” clauses and do not include the term “consequential loss”.

3. If so, what meaning is attributed to the words “consequential loss” in contractual exclusion clauses?

There is no generally accepted definition or concept of consequential loss. The meaning attributed to the words “consequential loss” would depend on the interpretation of those words in a contractual exclusion clause. 

There is no clear jurisprudence regarding the interpretation of the words “consequential loss” as this term is not commonly used in Slovak law. It would most likely be regarded as a type of “indirect loss”, but there are also no clear guidelines on the interpretation of “indirect loss”. 

Consequently, parties should define “consequential loss” or “indirect loss” in the contract if those terms are to be used in exclusion clauses.

4. Where a clause includes other heads of loss alongside consequential loss, how will the law approach such clauses?

Lack of sufficient jurisprudence may constitute a problem in disputes arising in relation to a contract concluded under Slovak law containing an exclusion of liability clause referring to consequential loss or other common-law-based heads of loss, where the term is not defined in a detailed way.

Slovak legal doctrine indicates that contractual deviations from the statutory liability model cannot be interpreted extensively. The court would always need to examine what was the common intention of the parties and the aim of the contract rather than its literal meaning.

5. Do consequential loss exclusion clauses have an impact on non-damages claims?

No, Slovak law generally allows an action for specific performance irrespective of the extent to which damages would or would not be recoverable.

Portrait of Michal Huťan
Michal Huťan
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Natália Jánošková
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Soňa Hanková