Exclusion and limitation of liability
Exclusion and limitation of liability

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

  • Exclusion and limitation of liability
  • The key issues
  • Quick view—contents and navigation
  • Quick view—what are exemption clauses?
  • Quick view—incorporation
  • Quick view—construction
  • Quick view—types of breach
  • Quick view—types of loss
  • Quick view—statutory controls under UCTA 1977
  • Quick view—statutory controls under the MA 1967
  • More...

This Practice Note considers exclusion and limitation of liability in business-to-business (B2B) contracts. It provides guidance on the common law and statutory controls affecting exclusion and limitation of liability clauses (also known as limitation of liability clauses, limitation clauses, exclusion of liability clauses, exclusion clauses and exemption clauses), including the provisions of the Unfair Contract Terms Act 1977 (UCTA 1977) and the Misrepresentation Act 1967 (MA 1967).

It looks at what types of clauses constitute exemption clauses and the three key issues to consider when drafting such clauses or analysing them in a dispute:

  1. incorporation

  2. construction, and

  3. statutory controls

It also considers the court’s approach to the exclusion or limitation of liability for certain types of breach (eg fundamental breach) and types of loss (eg direct loss, indirect and consequential loss, loss of profits, loss of use and loss of data), some of the common ways in which parties exclude or limit liability (eg financial caps, time bars, excluding rights of set-off) and exemption clauses and third parties.

For an overview of each section in this Practice Note and links to summaries of the key issues addressed, see: Quick view—contents and navigation below.

In this Practice Note, exclusion and limitation of liability clauses are collectively referred to as ‘exemption clauses’.

Drafting and negotiating exemption clauses

For a checklist of issues to consider when drafting or negotiating a limitation of liability

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