General Contract Clauses: Limitation of Liability

by Practical Law Commercial Transactions

These Standard Clauses detail the Limitation of Liability provisions in contracts, focusing on exclusions for consequential or indirect damages and setting maximum liability caps. They specify that neither party, nor their representatives, will be liable for consequential, indirect, incidental, special, exemplary, punitive, or enhanced damages, nor for lost profits or revenues, regardless of foreseeability, advisement, or legal theory. Additionally, the clauses limit aggregate liability to a specified multiple or percentage of amounts paid under the agreement within a defined period, with exceptions for obligations such as payment, indemnification, confidentiality breaches, and intellectual property rights infringement. The clauses also address situations where a remedy fails its essential purpose, reinforcing that the limitations reflect the parties' risk allocation and form the agreement's basis. These Standard Clauses are crucial for managing contractual risks and liabilities, ensuring clarity and predictability in business agreements.