WHY DO I NEED A LIMITATION OF LIABILITY IN MY CONTRACT?

So how do you draft a limitation of liability clause?

Limitations of liability (or LOLs) are no laughing matter. Often misunderstood, poorly written or just not there – this is one contractual clause that is guaranteed to be the subject of discussion and, probably, negotiation.

A well written limitation of liability clause protects a business and prevents a contract claim from wiping out (or reducing) shareholder value. Put simply, it works by placing a cap on a party’s liability to pay damages. This means that if a party breaches a contract AND the other party suffers a loss, the one in breach is only liable to pay up to the cap.

The best option is to ask a legal expert to help you. An effective clause should always include...

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