This clause says one party can claim unlimited damages from the other if something goes wrong—with no maximum amount. Normally, courts try to make compensation fair and proportionate to the actual harm, but an uncapped clause removes that protection. For instance, if you're a small business providing a £5,000 service and something fails, an uncapped liability clause could theoretically expose you to a £500,000 claim. This is especially dangerous in commercial contracts because the damages can far exceed the contract's actual value.
Always push to add a cap on liability—ideally limiting it to the total value of the contract itself, or 12 months of fees, whichever is smaller. If the other party resists, at least try to exclude certain types of damages (like "indirect" or "consequential" damages—lost profits, reputational harm) from the uncapped amount. Never sign an uncapped liability clause without understanding the worst-case financial scenario and confirming you can afford it. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says one party can claim unlimited damages from the other if something goes wrong—with no maximum amount.
Why should I care about this clause?
Normally, courts try to make compensation fair and proportionate to the actual harm, but an uncapped clause removes that protection.
What are my options?
For instance, if you're a small business providing a £5,000 service and something fails, an uncapped liability clause could theoretically expose you to a £500,000 claim.
How does this affect small businesses?
This is especially dangerous in commercial contracts because the damages can far exceed the contract's actual value.