Overview

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.