- Within the limitation of liability provision itself you would exclude those sections from the limitation as to the types of damages that could be awarded.
- Within the specific section you would include what’s called “trumping language” showing the intent that the remedies in that section would not be limited by the limitation of liability provision. That way when the two are read together your intent is clear.
In negotiating caps one of the decisions that you need to make is whether the cap applies to a specific period or is in effect for the term of the agreement. Caps that tie to a specific term may be smaller as the cap resets each term. Caps that tie to the term of the agreement need to be much larger and should be based upon a multiple of the cumulative amount of the purchase. If you don't do that your effective per unit protection gets reduced as volume increases over time.
Caps should also be consistent with the time period they are effective for. For example you might be willing to agree to a smaller cap if its measured on a "per incident" basis rather than a longer period. The longer the period of your agreement, the higher amount you need. That's simply because any claims that occur during the term will reduce the amount remaining amount that is available for protection..
Want to learn more? The companion book "Negotiating Procurement Contracts - The Knowledge to Negotiate" is now available on Amazon.com.