In its March 27 opinion in Biotronik v. Conor Medsystems Ireland,1 a sharply divided Court of Appeals ruled that a “no consequential damages” clause in a distribution agreement would not bar a distributor from recovering breach of contract damages for the profit it allegedly would have made reselling the product which was the subject of the distribution agreement. The court reversed a unanimous ruling below that the “no consequential damages” clause limited the distributor’s recovery to nominal damages. In its 2012 opinion in Abacus Federal Savings Bank v. ADT Security Services,2 the Court of Appeals noted that as a general rule “parties are free to enter into contracts…that limit liability to a nominal sum.” In Biotronik, the court was asked to decide whether the courts below properly applied a “no consequential damages” clause to rule that plaintiff could recover only nominal damages for breach of a distribution agreement.
Biotronik A.G., a distributor of medical products, brought suit against Conor Medsystems, Ireland, Ltd., a manufacturer of medical products, alleging that Conor breached a distribution agreement for a drug-eluting stent used in the treatment of coronary artery disease. Biotronik sought as damages the profits it allegedly would have made reselling the stent, or a substitute product provided by Conor, over the remaining term of the distribution agreement. Biotronik sought damages of $100 million.
