UCC § 2-719
Contractual Modification or Limitation of Remedy
(1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages, (a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer’s remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy. (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act. (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
Professor's notes
Section 2-719 allows parties to a goods contract to agree on remedies in addition to or in substitution for those the UCC otherwise provides, and to limit available remedies. Three limits apply. First, a contractual remedy may be declared the exclusive remedy, but if it fails of its essential purpose, the aggrieved party may pursue the full remedial scheme the UCC provides. Second, consequential damages may be excluded or limited unless the limitation is unconscionable. Third, limitation of consequential damages for personal injury from consumer goods is prima facie unconscionable.
The doctrinal move is to balance freedom of contract in remedial design against a floor of fair protection. Parties can make repair-or-replace the exclusive remedy, cap damages, or exclude consequential damages — but the "fails of its essential purpose" doctrine of § 2-719(2) prevents parties from using remedy limitations to strip the non-breaching party of any meaningful relief. A repair-only clause in a contract for goods that cannot be repaired fails of its essential purpose, and the statutory remedies revive.
Paradigm for failure of essential purpose: Buyer buys a commercial machine. The contract limits remedy to repair or replacement. The machine has a recurring defect the seller cannot fix after multiple attempts. The repair-only clause has failed its essential purpose; buyer may seek cover damages, consequential damages, or other Code remedies. The Carlson v. General Motors materials in Chapter 18 examine a durational warranty limitation that arguably works an unconscionable exclusion.
Students frequently overlook the interaction between § 2-719(2)'s failure-of-essential-purpose clause and § 2-719(3)'s consequential-damages limitation. Ask: if the repair clause fails of its essential purpose, does that automatically revive consequential damages? Courts are divided on whether § 2-719(2) and § 2-719(3) are independent or cascade; raise the split rather than settling it.
Connect to R2d § 208 (unconscionability), UCC § 2-302 (unconscionable contracts or terms), UCC § 2-714 (buyer's damages for accepted nonconforming goods), and the Chapter 18 warranty materials including Ardagh Metal Packaging v. American CRAFT Brewery. Section 2-719 is the key rule for the Chapter 18 discussion of how parties contract around warranty consequences.
Text
UCC § 2-719. Contractual Modification or Limitation of Remedy.
(1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages,
(a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer’s remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and
(b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy.
(2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act.
(3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
Source: UCC Article 2 (post-2022 amendments), as in the LawJ statutory corpus.