New York courts routinely enforce limitation of liability provisions, especially when they were negotiated by sophisticated parties. While the contractual provision is an affirmative defense, a court may rule on its enforceability on a motion to dismiss.
Such clauses are unenforceable when the misconduct
for which they would grant immunity amounts to intentional wrongdoing.
This wrongdoing could be explicit, as when it is fraudulent, malicious or done in bad faith, or it could be implicit, as when it reflects a reckless indifference to the rights of
others.
Note that the type of intentional wrongdoing that could render the provision unenforceable must be unrelated to any legitimate economic self-interest. So, a party can intentionally breach a
contract to advance a legitimate economic self-interest, and still rely
on the contractual limitation provision.
Electron Trading, LLC v Morgan Stanley & Co. LLC, NY Slip Op 00380 (1st Dep't January 23, 2018)
Here is the decision.
