Think Twice About That Liability Disclaimer Carveout

Law360, New York (December 18, 2013, 8:31 PM EST) -- Limitations on liability and disclaimers of damages for breach of contract claims are commonplace in outsourcing, licensing and procurement agreements. These provisions can create contentious negotiations as the parties seek to allocate the monetary risks of loss if the business relationship were to go awry.

Vendors do not want the monetary risk associated with any one contract to have material consequences on their business as a whole. Accordingly, vendor-drafted contracts typically disclaim all liability or otherwise limit the customer’s possible recovery to a small sum, usually...
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