Limitation Clause

A limitation clause is a contractual provision that seeks to limit the liability of one or more parties to a contract in the event of a breach of contract. The clause may seek to limit the amount of damages that can be recovered by the aggrieved party, or it may purport to exclude certain types of damages altogether. Limitation clauses are common in commercial contracts, but they can also be found in consumer contracts and other types of agreements.

When negotiating a contract, the parties will often try to allocate the risk of loss between them. This is done by including various provisions in the contract, such as warranties, indemnities and limitation clauses. The inclusion of a limitation clause indicates that the parties have expressly agreed that one party will not be liable for certain types of losses that may arise out of the performance of the contract.

There are several reasons why a party might want to include a limitation clause in a contract. For example, if a party is providing services which have an inherent risk of damage or injury (such as construction work), they may want to limit their liability in the event that something goes wrong. Or, if a party is selling goods which are known to be defective, they may want to limit their liability to the purchase price of those goods.

It is important to note that limitation clauses will only be effective if they are drafted correctly and included as part of a valid and enforceable contract. If there is any ambiguity in the wording of the clause, or if