Issue link: http://winesandvines.uberflip.com/i/480754
April 2015 P R A C T I C A L W I N E R Y & V I N E YA R D 57 W I N E B U S I N E S S There are legal arguments that could potentially invalidate a clause that sets potential damages unreasonably low. For example, the vintner might be able to legally challenge the valuation of the wine at $5 per gallon. But these legal challenges cost money, and there is never a guarantee that such challenges would be successful. The vintner would do well to avoid such valuations in a contract. And the custom-crush facility should also know that the lower the valuation, the greater the risk a court would invali- date the valuation. Contractual limitations of liability must be carefully considered. If you are a winery or a winemaker in California, you need to understand these contrac- tual limitations of liability before signing any contract with a custom-crush facility, an alternate proprietor, mobile bottler or other service provider. You need to read the contract, and you further should understand that you could object to these limitations or negotiate a more favorable contract clause. If you provide services to winemak- ers or wineries, you should also under- stand the need for contractual limitations of liability. Accidents happen, and they should not cost you your business. These limitations of liability, however, must be carefully drafted, and you should obtain an attorney with knowledge of the wine business to draft these limitations. Contractual limitations make the right insurance all the more important. All parties should also understand the need for the right insurance to cover situations when things do go badly. Typically, commercial general liability policies will not cover damage to wine that occurs during the "winemaking pro- cess," which may include bottling. Both the vintner and the custom-crush facility would do well to have an errors and omission policy. If the vintner had the right insurance, it might be able to simply obtain relief from its insurer. And if the custom-crush facility had the right insurance, it might be less concerned about broad contractual limitations of liability. PWV John N. Heffner has been a director with Dick- enson, Peatman & Fogarty, in Napa, Calif., since 2012. Prior to joining DP&F in 2007, Heffner practiced commercial litigation for nearly five years at Reed Smith LLP in Oak- land and San Francisco, Calif. Heffner has litigated a broad range of commercial disputes and currently represents numerous clients in the wine industry. R E G I S T E R T O D AY WWW.CRAFTBEVERAGEEXPO.COM We offer a Special Rate for artisan wine producers like you. TTB LABEL APPROVALS Low per-label costs Gov't. Liaison Negotiations or Footwork Reasonable Hourly Rates TRADEMARK SEARCHES As Low as $185 Your trade names or designs are searched at the U.S. Patent Office to help establish valuable ownership or avoid costly legal liability. Over 100 years' total staff experience handling every government liaison need for industry. Phone or write for details. 200 N. Glebe Rd., Suite 321 Arlington, Virginia 22203 Phone: (703) 524-8200 Fax: 525-8451 TOLL-FREE 1-800-642-6564 Major Credit Cards Accepted www.trademarkinfo.com Since 1957 GovtLiaison_Dir08 11/29/07 2:00 PM Pag