Exclusion and limitation of liability
Exclusion and limitation of liability

The following Commercial guidance note provides comprehensive and up to date legal information covering:

  • Exclusion and limitation of liability
  • Statutory controls—summary
  • B2B contracts
  • B2C contracts
  • Common law considerations
  • Drafting and negotiation
  • Frequently asked questions

This Practice Note considers exclusion and limitation of liability in business-to-business (B2B) and business-to-consumer (B2C) contracts. It provides guidance for negotiating and drafting exclusion and limitation of liability clauses (also known as limitation of liability clauses, limitation clauses, exclusion of liability clauses and exclusion clauses). It covers the common law and the statutory provisions of the Unfair Contract Terms Act 1977 (UCTA 1977) and the Consumer Rights Act 2015 (CRA 2015) in the context of exclusion and limitation of liability. It contains practical guidance on structuring a standard exclusion and limitation of liability clause in a commercial contract, and deals with issues relating to direct loss and indirect loss, consequential loss, loss of profits, loss of use, loss of contracts, loss of opportunity, loss of revenue, loss of savings and other types of financial and pecuniary loss. For a checklist of issues to consider when drafting or negotiating a limitation of liability provision, see: Drafting and negotiating an exclusion and limitation of liability clause—checklist. For an example exclusion and limitation of liability clause for use in a B2B contract, see Precedent: Limitation of liability clause. A contract term which excludes or limits liability is subject to both statutory and common law controls. A different regime is in place for B2B and B2C contracts and it is generally more difficult for businesses to exclude or limit their liability