In This Issue:

Buyer Beware: Court Upholds Punitive Damages Waiver in Case Alleging Fraud for “New” Aircraft Sale -

Embraer v. Dougherty Air Trustee: Avoiding Foot Faults in Your Residual Value Guarantee Contract -

Selecting the Best Aircraft Management Company -

Buyer Beware: Court Upholds Punitive Damages Waiver in Case Alleging Fraud for "New" Aircraft Sale -

In a recent decision, the Texas Supreme Court upheld a contractual waiver of punitive damages despite a finding of fraud by the seller in the sale of a supposedly new aircraft that instead contained used and repaired engines. Though typically not available for breach-of-contract claims, punitive damages (also called exemplary damages) may be awarded in addition to actual damages in cases involving fraud or other types of egregious behavior, both as a punishment and to serve as a deterrent. Waivers of punitive damages are often found in contracts involving the sale and financing of aircraft assets, notwithstanding some uncertainty as to the waivers’ utility and enforceability. In the case at hand, the Court upheld such a waiver and reversed the jury’s award of significant punitive damages.