Arbitration Simulator

ARBITRATION DECISION

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PARTIES:
Claimant: LogisticsCo LLC
Respondent: SolidEdge, Inc.

BACKGROUND & JURISDICTION:
This arbitration arises from a dispute between the Claimant, LogisticsCo LLC, and the Respondent, SolidEdge, Inc. The Claimant seeks $50,000 in damages for losses incurred during a 36-hour data ingestion outage on the Respondent’s cloud infrastructure [7]. The parties agreed to resolve this dispute through final and binding arbitration administered by DecisionLayer.AI under its Foundational + Strict Contractual Ruleset [1]. Jurisdiction is established by the consent of the parties.

SUMMARY OF ARGUMENTS:
Claimant's Argument: LogisticsCo LLC asserts two primary arguments. First, the "User Responsibility" clause is invalid because it contains a material drafting error, purporting to waive claims against "FiveStar, Inc." instead of the Respondent, SolidEdge, Inc. Because an exculpatory clause must be specific, it fails to release Respondent from liability. Second, the $100 "Limitation of Liability" cap is unconscionable and fails of its essential purpose, as it provides no meaningful remedy for a 36-hour total failure of Respondent’s core service. Claimant provides a detailed accounting of $50,000 in direct damages [8].

Respondent's Argument: SolidEdge, Inc. counters that the naming of "FiveStar, Inc." is an obvious scrivener's error and that the contract should be reformed to reflect the parties' clear intent to limit SolidEdge's liability. Respondent argues that the $100 liability cap is unambiguous and enforceable in a business-to-business transaction where Claimant accepted the terms by using the service. They also contend that performance metrics are typically governed by separate Service Level Agreements, not the general website Terms of Use for an "as-is" service [9].

Claimant's Rebuttal: LogisticsCo LLC rebuts that the scrivener's error defense is inapplicable to a contract of adhesion, as any mistake was unilateral on the part of the drafter, not mutual. Claimant also rejects the argument that the terms only apply to an informational website, stating that the data ingestion services are accessed via the website and are therefore covered by the terms. They characterize the 36-hour outage as a total failure of performance that frustrates the contract's purpose, making the liability cap unenforceable [10].

Respondent's Rebuttal: SolidEdge, Inc. replies that the contract's "Severability of Provisions" clause means that even if the waiver in the "User Responsibility" section is found to be ineffective, the separate and explicit "Limitation of Liability" section, which correctly names SolidEdge and caps damages at $100, must be enforced. Respondent notes that Claimant has not proven gross negligence or intentional misconduct, which would be necessary to pierce a B2B liability cap, and that continued use of the service constitutes acceptance of the terms, including the $100 limit [11].

FINDINGS OF FACT:
1. Claimant, LogisticsCo LLC, utilized the services of Respondent, SolidEdge, Inc., which are governed by the Terms of Use published on the Respondent's website [2].
2. A 36-hour data ingestion outage occurred on the Respondent's platform, which interrupted the Claimant's business operations [7].
3. As a result of the outage, Claimant alleges it incurred $50,000 in direct operational losses, data recovery fees, and other expenses [8].
4. The "User Responsibility" section of the governing contract states, "The user waives all claims against FiveStar, Inc. and its affiliates..." It does not name SolidEdge, Inc. [3].
5. The "Limitation of Liability" section of the governing contract explicitly names the Respondent, stating, "SolidEdge shall not be liable for any loss, injury, claim, liability, or damage of any kind... To the extent the foregoing limitation of liability is prohibited, SolidEdge's sole obligation to you for damages shall be limited to $100 USD." [4].
6. The governing contract contains a "Severability of Provisions" clause, which states that if any provision is unlawful, void, or unenforceable, it shall be deemed severable from the remaining provisions, which shall remain valid and enforceable [5].
7. The governing contract provides that the website and content are provided on an "as-is" basis and expressly disclaims all warranties [6].

FINDINGS OF LAW:
1. The "User Responsibility" clause of the governing contract is unenforceable as applied to Respondent. The clause explicitly names "FiveStar, Inc." as the party against whom claims are waived [3]. As argued by the Claimant, exculpatory language must clearly and unequivocally identify the party being released from liability. Because the clause fails to name SolidEdge, Inc., it does not serve to waive Claimant's claims against Respondent [8]. Respondent's argument that this is a scrivener's error is unpersuasive, particularly in the context of a contract of adhesion where the error was not mutual [9, 10].
2. The "Limitation of Liability" clause is valid and enforceable. This clause is a separate provision from the "User Responsibility" clause and explicitly names "SolidEdge" [4]. It clearly and unambiguously limits SolidEdge's liability for any damages to $100 USD [4].
3. Claimant’s argument that the limitation of liability is unconscionable and fails of its essential purpose is not compelling in this context [8]. The governing contract is a business-to-business agreement for services provided on an "as-is" basis [6]. In such commercial transactions, liability limitations are regularly enforced. Claimant has not alleged facts rising to the level of gross negligence or intentional misconduct that would be required to invalidate such a clause [11].
4. The "Severability of Provisions" clause dictates that the unenforceability of the "User Responsibility" clause does not invalidate the remainder of the contract [5]. Therefore, the "Limitation of Liability" clause remains in full force and effect. As argued by Respondent, even if the waiver is severed, the liability cap remains operative [11].
5. Based on the foregoing, while Respondent is not shielded by the defective "User Responsibility" clause, its liability is contractually limited to $100 as stipulated in the "Limitation of Liability" clause [4].

AWARD:
Respondent, SolidEdge, Inc., is ordered to pay Claimant, LogisticsCo LLC, the sum of $100.00 USD. Each party shall bear its own costs and fees.

CITATIONS:
1. Arbitration Rules
2. The Governing Contract, Legal Notice
3. The Governing Contract, User Responsibility
4. The Governing Contract, Limitation of Liability
5. The Governing Contract, Severability of Provisions
6. The Governing Contract, Disclaimer
7. Question for Arbitration
8. Plaintiff Argument
9. Respondent Argument
10. Plaintiff Rebuttal
11. Respondent Rebuttal

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Generated on: 2026-08-26 21:19:04 UTC