Sole & Exclusive Remedy Clause
Also called: Exclusive Remedy Provision · Limited Remedy Clause
A sole and exclusive remedy clause states that a specific remedy — such as repair, replacement, or a defined service credit — is the only recourse available for a particular failure, explicitly ruling out other remedies like damages or termination for that same issue. It concentrates risk allocation into one narrow, predictable outcome.
In more detail
This clause is most commonly paired with service credits in SLAs — stating that a service credit is the customer's sole remedy for downtime prevents the customer from also separately claiming damages for the same outage, which is exactly the protection the vendor is buying with the clause.
From the customer's side, accepting an exclusive remedy is a real trade-off: a modest service credit may be a fraction of the actual business impact of an outage, and the clause forecloses claiming the difference through other means.
Some legal systems will refuse to enforce an exclusive remedy that "fails of its essential purpose" — for example, if the named remedy turns out to be illusory or grossly inadequate — but this is a high bar and shouldn't be relied on as a backup protection.
An SLA states that service credits are the customer's "sole and exclusive remedy" for any downtime. Even if an outage causes the customer significant lost revenue, the contract limits their recourse to the defined service credit — they cannot separately sue for the broader business loss.
What our lawyers check
- What specific remedy is designated as exclusive, and whether it's realistic relative to actual risk
- Which types of failures the exclusivity applies to, versus those still open to other remedies
- Whether the named remedy could be argued to be illusory under the governing law
- How this clause interacts with the broader limitation of liability clause
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
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