Contract attorney here. Limitation of liability clauses are generally enforceable, but they are not bulletproof. When a vendor misses a delivery deadline, the enforceability of the LoL clause depends on several factors that courts examine carefully.
Key questions to analyze:
- Was time of the essence? If the contract included a time is of the essence clause, the missed deadline is more likely to constitute a material breach, which may allow you to void the contract entirely -- including the LoL clause
- Does the LoL clause cover consequential damages? Most well-drafted LoL clauses exclude consequential and incidental damages. If your losses are direct damages (e.g., the difference between contract price and cover price), they may fall outside the LoL exclusion
- Was there gross negligence or willful misconduct? Under UCC Section 2-719(2), LoL clauses that limit remedies for unconscionable conduct are unenforceable
- Did you mitigate? Under UCC Section 2-712, a buyer has the right to cover by purchasing substitute goods. If you failed to mitigate, the vendor will argue your damages are inflated
Practically speaking, if the vendor LoL clause caps damages at the contract price or some fraction of it, you should calculate your actual losses and compare them to the cap. If the gap is significant, it may be worth litigating the enforceability of the clause. Courts apply a reasonableness test, and a cap that is grossly disproportionate to foreseeable losses may be struck down as unconscionable.
Before filing suit, send a detailed demand letter quantifying your damages and citing the specific contract provisions the vendor breached. Many vendors will negotiate a settlement above the LoL cap rather than risk a court finding that the clause is unenforceable, which would expose them to full damages.