- Limits on the type of damages that may be recovered.
- Limits on the amount of damages that may be recovered
- Limits on various types of claims
- Limits on total liability for the contract term
- Limits on liability for a defined period such as annual limits.
- Limits on liability per occurrence.
- Limits on the types of costs that may be recovered/
- Limits on other remedies.
- Limits on individual costs.
- Limits on periods when claims may be made.
- Limits on individual charges.
- Thresholds that must be met before it triggers the right to claim a remedy is a form of limitation.
- The standard of commitment used limits what the Supplier is responsible for:
- Refusing to accept certain terms and responsibilities also helps limit the Supplier’s exposure should they not be able to meet those commitments.
- Any liquidated damages provisions also serve as a limitation on the Supplier's liability
The key point here is while there may be a specific limitation of liability section in the agreement, language used throughout the agreement can further limit the Supplier's potential liability. In understanding what the Supplier is potentially liable for you need to read all of the terms together to make sure that they are not in conflict. If there is potential conflict between the remedy and potential liability in one section versus the Limitation of Liability Section you need to make the intent clear.
There are two ways to make the intent clear. One would be to specifically exclude that section from the Limitation of Liability. The other is to make it clear in that section that that the limitation of liability section does not apply to that section. If you don't make it clear the Limitation of Liability limiting the remedies in the the other section. For example if your limit of liability limited recoveries to only direct damages and you had a section where if there was problem the Supplier was to reimburse you for all costs you incur, the two would be read together and you would only be able to recover costs associated with the direct damages you incur and not be able to recover incidental or consequential costs.
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