limitation-of-liability-clauses

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."