Limiting/Excluding Liability in Contracts

Introduction

The following article provides very useful guidance on what can and can’t be excluded/limited in a business-to-business commercial contract:

In brief: Limiting contractual liability in United Kingdom

In summary (if you do not wish to read the full article):

1. A party can never exclude its liability for:

   1. Death or personal injury caused by its negligence;

   2. Its title (ownership) of products being sold/supplied; or

   3. Fraud;

1. A party can exclude its liability (often subject to a test of reasonableness) for indirect losses;

2. A party can cap its financial liability subject to a test of reasonableness.

The article also gives guidance on indemnities and liquidated damages clauses.

Conclusion

Care should be taken when it comes to drafting exclusions or limitations of liability.

Contact Richard Jenkins on 024 7698 0613 or Richard@clariclegal.co.uk for further advice or assistance.

This should not be relied upon for legal advice.