This clause says that if one party deliberately lies to trick the other into signing the contract, that party cannot limit their liability for the fraud. For example, if a seller claims a car has never been in an accident when they know it has, and you buy it based on that lie, they cannot hide behind a liability cap. Fraud is treated as a serious crime in both UK and US law, and courts will never allow someone to escape liability for deliberate deception. This clause matters because it gives you real protection against being deliberately misled.
Make sure this clause is in your contract—it should say something like "nothing in this contract limits liability for fraud or fraudulent misrepresentation." If the other side refuses to include it, that's extremely suspicious and you should walk away from the deal.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says that if one party deliberately lies to trick the other into signing the contract, that party cannot limit their liability for the fraud.
Why should I care about this clause?
For example, if a seller claims a car has never been in an accident when they know it has, and you buy it based on that lie, they cannot hide behind a liability cap.
What are my options?
Fraud is treated as a serious crime in both UK and US law, and courts will never allow someone to escape liability for deliberate deception.
How does this affect small businesses?
This clause matters because it gives you real protection against being deliberately misled.