Limitation of liability

How it is used

Usually one of the most negotiated clauses. It often sets a cap (for example 100% of annual fees) and excludes indirect or consequential loss. Some liabilities cannot be limited by law, such as liability for fraud or, in England, for death or personal injury caused by negligence.

Example sentences

1. The limitation of liability clause caps our exposure at the contract value.

2. The customer rejected our limitation of liability and asked for an uncapped indemnity.

Common collocations

• limitation of liability clause
• cap on liability
• exclude liability
• uncapped liability

Related terms

• liabilityLegal responsibility for something, especially the duty to pay compensation for loss or harm; in accounting, also a debt that a business owes.
• indemnityA promise by one party to cover specific losses or costs that the other party suffers, for example claims brought against it by third parties.
• damagesMoney that a court or tribunal orders one party to pay another as compensation for loss caused by a breach of contract or another legal wrong.
• clauseA numbered section of a contract that deals with one specific subject, such as payment, confidentiality or termination.

More terms: Contract Terms & Clauses

• obligation
• governing law
• force majeure
• warranty
• term
• condition
• representation
• confidentiality clause
• amendment
• waiver
• assignment
• entire agreement clause