You can't contract your way out of intentional wrongdoing.

In New England Country Foods v. VanLaw Food Products, the California Supreme Court answered a certified question from the Ninth Circuit, holding that contract clauses limiting liability for intentionally inflicted harm are invalid under Civil Code §1668. After VanLaw allegedly poached Trader Joe's as a client by cloning New England's barbeque sauce, New England sued for intentional interference and breach of fiduciary duty.

VanLaw tried to rely on a contract clause limiting damages for lost profits and consequential losses. But the Court firmly held that §1668 prohibits contracts from shielding parties against liability for their own willful misconduct. While parties can limit damages for ordinary breaches of contract, they cannot sidestep responsibility when intentional torts are involved. For litigation teams, the lesson is clear: limitations of liability are powerful—but they stop where intentional harm starts.