In short
A limitation of liability clause sets the most one side can be made to pay if things go wrong, and lists what falls outside that limit.
What it means for you
The cap decides your worst case. It is often tied to the fees, such as the fees paid in the 12 months before a claim. Some losses usually sit outside the cap, such as fraud, death or personal injury, and sometimes data protection or confidentiality claims.
Where to find it
In the clause usually called Limitation of liability. A data processing agreement or a schedule can set a separate cap, so read them together.
What to look for
- How the cap is worked out, and over what period
- What sits outside the cap
- Whether the cap is the same for both sides
- Whether a schedule or a data processing agreement changes it
How Gathersense helps
Contract review checks the cap against your playbook. If the other side moved it, from 12 months of fees to 24 for example, you see the change and what it puts at risk.
