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Some question the enforceability of the provision especially if there is a wide gap between what a plaintiff would collect compared to the liability cap. The short of it is that limitations of liability are generally upheld and enforceable by the courts.
Generally, there are two components to limitation of liability provisions: (1) limiting damages to certain types of liability; and, (2) limiting the amount of potential liability.
Generally, there are two components to limitation of liability provisions: (1) limiting damages to certain types of liability; and, (2) limiting the amount of potential liability.
Indemnification usually transfers risk between the parties to the contract. Limitation of liability prevents or limits the transfer of risk between the parties. With those basic concepts in mind, think about the risks that arise out or relate to the contract.
A limitation of liability clause in a contract limits the amount of money or damages that one party can recover from another party for bdocHubes or performance failures. In other words, the clause can put a cap on the number of damages the organization will have to pay under certain circumstances.

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A limitation of liability provision places a financial cap on all your liability, for both consequential damagesto the extent any indirect damages may have not been waivedas well as for corrective costs and all other direct damages.
Generally, there are two components to limitation of liability provisions: (1) limiting damages to certain types of liability; and, (2) limiting the amount of potential liability.
Commonly, a partys indemnification obligations are carved-out from the limitations of liability meaning a party has unlimited liability for indemnification obligations.
Commonly, a partys indemnification obligations are carved-out from the limitations of liability meaning a party has unlimited liability for indemnification obligations.
Limitation of liability clauses are an important contractual tool designed to manage overall risk by limiting a partys potential liability for damages. This clause can be the most important term in a contract and should be carefully reviewed and understood. Often, limitations of liabilities are highly negotiated.

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