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I was reading the some contract termination terms, and came across a phrase that I could not derive the exact meaning of and it's still bothering me. Can somebody please explain 'without prejudice to damages' in other words? As far as I understand, it is a truncated version of 'without prejudice to claim for any damages', but that does not make it any more clear. I don't have the document on hand right now, but here's a short, approximate version of it:

If Y fails to do something, X reserves the right to:

  • Claim for compensation for any losses incurred
  • Terminate the contract (without prejudice to damages)

If I'm understanding it correctly, in other words, terminating the contract does not bar X from claiming damages as well?

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    I suggest you should consult a specialist contract lawyer. “Most people” think that “without prejudice” means, broadly, “without establishing any pre-conditions…” which would include “Terminate the contract without prejudice to damages”… However, one thing lawyers, judges and courts clearly do not like is brackets. Brackets in court are perhaps more abhorrent than commas or any other punctuation. Can you find one lawyer who thinks “Terminate the contract (without prejudice to damages)” could ever mean anything useful in itself; that is, without specific qualification? – Robbie Goodwin Jul 14 '18 at 22:56
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without prejudice TFD

By invoking this statement, a party is asking for assurances from the other party that the information provided by them will not be used against them to their disadvantage. Without any loss or waiver of rights or privileges.

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If I'm understanding it correctly, in other words, terminating the contract does not bar X from claiming damages as well?

Yes, you are correct.

X would be able to terminate the contract (which is inherently reciprocal), but still retain the faculty to claim for damages. Without doing so, X would still be liable to comply with his/her part of the contract, all things being equal.

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"Without prejudice to your right to damages" might mean "without having any adverse effect on your right to claim damages" but if you were drafting a contract you should consider the possibility that it could be argued that the AMOUNT OF your damages was affected despite such a clause.

That's why we go to law school.

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