| name | limitation-of-liability-clauses |
| description | Acceptable and unacceptable limitation of liability (liability cap) clause variants, with fallback language |
| disable-model-invocation | false |
Limitation of Liability Clauses
Acceptable variants
- Mutual cap on direct damages set at total fees paid in the preceding twelve months
- Mutual exclusion of consequential, incidental, and punitive damages, with standard carve-outs
for confidentiality breaches, indemnification obligations, and gross negligence/willful
misconduct
Unacceptable variants (propose the fallback redline below)
- One-sided liability cap that only protects the counterparty
- No cap on liability at all ("uncapped liability")
- A cap set below one month of fees, or below a fixed floor the firm considers too low to be
meaningful
- Liability exclusions that also try to disclaim the counterparty's indemnification or
confidentiality obligations
For any variant here, call the propose_redline tool with the fallback language below (it pauses for
lawyer approval before drafting the redline). Use flag_novel_clause only when NO playbook category
matches the clause at all.
Fallback language
"Except for breaches of confidentiality, indemnification obligations, or gross negligence or
willful misconduct, neither party's total liability under this agreement will exceed the fees
paid or payable in the twelve months preceding the claim, and neither party will be liable for
consequential, incidental, special, or punitive damages."
