IL STATEIllinois Supreme Court
2006

Razor v. Hyundai Motor America

854 N.E.2d 607Illinois Supreme Court • Decided 2006Modified

HOLDING

A customer bought a Hyundai with a limited warranty that excluded consequential damages. When the car had defects, she sued for damages beyond repair costs. The Illinois Supreme Court ruled that consequential damages disclaimers in warranties are enforceable on their own—they don't automatically fail just because the limited remedy (repair/replacement) doesn't work. The clause is valid unless it's unconscionable (shockingly unfair). This matters to subcontractors because it means your warranty disclaimers limiting damages can hold up in court, even if your repair work doesn't fully fix the problem.

KEY FINDINGS

Liquidated Damages

Include clear, separate consequential damages exclusions in your warranty language—they're enforceable in Illinois if properly written

Dispute Resolution

A limited remedy (like repair or replacement) failing doesn't automatically kill your damages cap; they're treated as independent provisions

FULL COURT OPINION