Limitation of Liability Clauses

Limitations of liability clauses are contractual provisions that specify the maximum extent to which one party can be held responsible for damages or losses arising from the agreement. These clauses aim to allocate risk fairly and protect parties from unforeseen, excessive liabilities. Typically, they set a cap on damages or exclude certain types of claims, such as indirect or consequential damages. While they provide legal certainty, they must be reasonable and clear; overly broad or unfair limitations may be challenged in court. Overall, these clauses define and restrict the scope of liability to manage risk effectively for both parties.