Limitations of Liability and Indemnification Provisions
Every company wants to limit its potential liability and most hire attorneys to help them draw up contracts that will do just that. However, the University may NOT enter a contract with a provision that limits the potential liability of the other party. The following are examples of such provisions:
- “The parties agree that, under no circumstances, shall ABC, Inc.’s, liability exceed the total amount received by ABC under this contract.”
- “The University agrees to indemnify and hold harmless Very Good Company for any claims that may arise out of Very Good’s performance of this agreement.”
- “The Excellent Corporation will not be liable to the University for any indirect or consequential damages.”
Entering a contract that contains one of these provisions will limit the University’s rights to recover if something goes wrong later with the contract/product/service, etc.