This clause puts a maximum limit on how much money you can recover, even if the other party is strictly liable (meaning they're responsible regardless of whether they were careful or not). Strict liability applies in situations like product defects or abnormally dangerous activities—you don't need to prove the other party was negligent. The cap might say "liability is limited to £50,000" no matter what damage occurs. This is medium-risk because while caps are normal in contracts, capping strict liability is unusual and can leave you severely undercompensated if something goes seriously wrong.
Carve out strict liability from any cap in the contract. Propose language like: "Liability caps do not apply to claims arising from strict liability, product defects, or breach of statutory warranties." If the other party won't budge, at least ensure the cap is high enough to cover your realistic worst-case scenario—get an insurance quote first to know what that number should be. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause puts a maximum limit on how much money you can recover, even if the other party is strictly liable (meaning they're responsible regardless of whether they were careful or not).
Why should I care about this clause?
Strict liability applies in situations like product defects or abnormally dangerous activities—you don't need to prove the other party was negligent.
What are my options?
The cap might say "liability is limited to £50,000" no matter what damage occurs.
How does this affect small businesses?
This is medium-risk because while caps are normal in contracts, capping strict liability is unusual and can leave you severely undercompensated if something goes seriously wrong.