Limitations On Liability

The Limitations on Liability can be used to limit what breach-of-contract damages either party could be liable for.

Under common law, parties are only liable for foreseeable damages, not for unforeseeable damages. Often, the limitations on liability clause is a simple restatement of this common law principle, that neither party would be liable for unforeseeable losses suffered by the other. More robust limitations on liability clauses can go further, to limit even foreseeable losses, either those losses arising out of certain kinds of claims (infringement, or disclosure of confidential information for example), or putting a cap on the total losses the party can be liable for.

Even though the simple version of the clause simply restates common law principles, and is, therefore, redundant, including one likely has a placebic effect. The clause is so common, attorneys and businessmen are so accustomed to seeing them and including them that the small cost of including an extra, short clause in the agreement is probably outweighed by making a party more comfortable signing an agreement including this clause they have become used to seeing.

The basic Contract Standards clause simply restates the common law bar against unforeseeable damages. Our variants offer more robust limits, limiting claim types and total liabilities.

Clause Text

Key Question: Are either party's foreseeable losses limited?  Jump to Standard

Neutral Standard

Limitation on Liability

[PARTY A] Liability. [PARTY A] will not be liable for breach-of-contract damages suffered by [PARTY B] that are remote or speculative, or that [PARTY A] could not reasonably have foreseen on entry into this agreement.

Maximum Liability. [PARTY A]'s liability under this agreement will not exceed $[PARTY A MAXIMUM LIABILITY].

Excluded Claims. [PARTY A] will not be liable for losses due to any claims arising out this agreement and relating to [EXCLUDED CLAIMS SCOPE].

Limitation on Liability

[PARTY A] Liability. [PARTY A] will not be liable for breach-of-contract damages suffered by [PARTY B] that are remote or speculative, or that [PARTY A] could not have reasonably have foreseen on entry into this agreement.

Maximum Liability. [PARTY A]'s liability under this agreement will not exceed $[MAXIMUM LIABILITY].

Mutual Limitation on Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

Limitation on Liability

Mutual Limitation on Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

Maximum Liability

[PARTY A]'s Maximum Liability. [PARTY A]'s liability under this agreement will not exceed $[MAXIMUM LIABILITY].

[PARTY B]'s Maximum Liability. [PARTY B]'s liability under this agreement will not exceed [$[MAXIMUM LIABILITY]] [the total amount paid by [PARTY A] to [PARTY B] under this agreement over the six months preceding the claim giving rise to the liability]].

Limitation on Liability

Mutual Limitation on Liability. Neither Party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not have foreseen on entry into this agreement.

Maximum Liability

[PARTY A]'s Maximum Liability. [PARTY A]'s liability under this agreement will not exceed $[MAXIMUM LIABILITY].

[PARTY B]'s Maximum Liability. [PARTY B]'s liability under this agreement will not exceed [$[MAXIMUM LIABILITY] [the total amount paid to [PARTY B] over the six months preceding the claim giving rise to liability]].

Excluded Claims

Excluded Claims for [PARTY A]. [PARTY A] will not be liable for losses due to any claims arising out of this agreement and related to [PARTY A EXCLUDED CLAIMS SCOPE].

Excluded Claims for [PARTY B]. [PARTY B] will not be liable for losses due to any claims arising out of this agreement and related to[PARTY B EXCLUDED CLAIMS SCOPE].

 Limitation on Liability

 [PARTY A] Liability. [PARTY A] will not be liable for breach-of-contract damages suffered by [PARTY B] that are remote or speculative, or that [PARTY A] could not have reasonably have foreseen on entry into this agreement.

 Maximum Liability. [PARTY A]'s liability under this agreement will not exceed the fees paid by [PARTY B] under this agreement during the 12 months preceding the date upon which the related claim arose.

Limitation on Liability

[PARTY B] Liability. [PARTY B] will not be liable for breach-of-contract damages suffered by [PARTY A] that are remote or speculative, or that [PARTY B] could not have reasonably have foreseen on entry into this agreement.

Maximum Liability. [PARTY B]'s liability under this agreement will not exceed $[MAXIMUM LIABILITY].

Limitation on Liability

[PARTY A] Liability. [PARTY B] will not be liable for breach-of-contract damages suffered by [PARTY A] that are remote or speculative, or that [PARTY B] could not reasonably have foreseen on entry into this agreement.

Maximum Liability. [PARTY B]'s liability under this agreement will not exceed $[PARTY A MAXIMUM LIABILITY].

Excluded Claims. [PARTY B] will not be liable for losses due to any claims arising out this agreement and relating to [EXCLUDED CLAIMS SCOPE]. 

Limitation on Liability

Mutual Limitation on Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

Maximum Liability. [PARTY A]'s liability under this agreement will not exceed $[MAXIMUM LIABILITY].

Limitation on Liability

Mutual Limitation on Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

[PARTY A]'s Maximum Liability. [PARTY A]'s aggregate liability under this agreement will not exceed the amount of fees [PARTY B] has paid to [PARTY A].

 Limitation on Liability

Mutual Limit on Liability. Neither party will be liable for breach-of-contract damages suffered by the other party that are remote or speculative, or that could not have reasonably been foreseen on entry into this agreement.

Maximum Liability. [PARTY A]'s liability under this agreement will not exceed the fees paid by [PARTY B] under this agreement during the 12 months preceding the date upon which the related claim arose.

Limitation on Liability

Mutual Limit on Liability. Neither party will be liable for breach-of-contract damages suffered by the other party that are remote or speculative, or that could not have reasonably been foreseen on entry into this agreement.

Maximum Liability. [PARTY A]'s liability under this agreement will not exceed the fees paid by [PARTY B] under this agreement during the 12 months preceding the date upon which the related claim arose.

Limitation of Liability

Mutual Limitation of Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

Limitation on [PARTY A]'s Liability. [PARTY A] will not be liable for any damages that result from any downtime or failure of performance of the [DELIVERABLE], or [PARTY B] otherwise not being able to use or access the [DELIVERABLE].

Limitation on Liability

Mutual Limit on Liability. Neither party will be liable for breach-of-contract damages suffered by the other that are remote or speculative, or that could not reasonably have been foreseen on entry into this agreement.

Maximum Liability. [PARTY B]'s liability for any breach-of-contract claims under this agreement will not exceed the Compensation [PARTY B] received from [PARTY A] under this agreement over the [six]-month period immediately preceding the claim.

Limitation on Liability

Mutual Limitation on Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

Mutual Maximum Liability. Neither party's total aggregate liability under this agreement will exceed the total amount [PARTY B] pays to [PARTY A] under this agreement.

Limitations on Liability

Mutual Limitation on Liability. Neither party will be liable for breach-of-contract damages that are remote or speculative, or that the breaching party could not reasonably have foreseen on entry into this agreement.

Waiver of Claims. [PARTY B] hereby waives all claims against [PARTY A], and [PARTY A]'s agents, advisors, employees, members, officers, directors, partners, trustees, beneficiaries, and shareholders, for damage to any property or injury to or death of any person in, on, or in connection with the Premise or the property, except to the extent the damage or injury is caused by [PARTY A]'s negligence or willful misconduct, or that of [PARTY A]'s agents, employees, or contractors.

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