Limitation of Liability
A clause that caps the amount of damages one party can recover from another and excludes certain categories of damages (such as consequential, indirect, or lost profits).
What it means
Limitation-of-liability clauses set two boundaries: a cap (often tied to fees paid in the prior 12 months) and category exclusions (consequential, incidental, punitive damages, lost profits). Most jurisdictions enforce these clauses between sophisticated commercial parties but void them for gross negligence, willful misconduct, fraud, IP infringement, or breach of confidentiality. State consumer-protection law may further restrict them.
Read more
- Indemnification Clauses Explained (Plain English) — Learn what indemnification clauses are, how mutual vs. one-sided indemnity works, and how to negotiate fair terms in any business contract.