{"id":97,"date":"2015-02-19T04:54:15","date_gmt":"2015-02-19T04:54:15","guid":{"rendered":"http:\/\/iilsindia.com\/blogs\/?p=97"},"modified":"2023-10-28T13:26:16","modified_gmt":"2023-10-28T07:56:16","slug":"limitation-of-liability","status":"publish","type":"post","link":"https:\/\/www.iilsindia.com\/blogs\/limitation-of-liability\/","title":{"rendered":"LIMITATION OF LIABILITY"},"content":{"rendered":"

A limitation of liability clause is a provision in a contract that limits the amount of exposure a company faces incase a lawsuit is filed or another claim is made. Such a clause can “cap” the amount of potential damages to which a company is exposed. Limitation of liability clauses limits the liability to one of the following amounts, viz. \u00a0the compensation and fees paid under the contract; an amount of money agreed upon; available insurance coverage; or a combination of two or more of the above.<\/p>\n

However, the debate with regards to limitation of liability clauses has been whether these clauses are enforceable. Some states have held that these clauses are not enforceable because they are adhesive or they are void as a matter of public policy or the parties did not have an opportunity to freely negotiate them.<\/p>\n

But in general, the law permits parties to negotiate limitation of liability clauses. However, courts have refused to enforce such provisions where the court found that:<\/p>\n