By Buddy Broussard, LegalSifter
Most commercial contracts begin with familiar business terms: what will be delivered, what it will cost, and when performance is due. But when negotiations become difficult, they rarely stall over scope or timing. They stall over risk.
That’s why the limitation of liability clause is one of the most negotiated and most consequential provisions in modern contracting. Few provisions shape contract exposure more directly than limitation of liability. At its core, this clause answers a simple question: What is the maximum financial downside if the deal goes wrong?
World Commerce & Contracting’s annual Most Negotiated Terms research consistently ranks limitation of liability among the most heavily negotiated provisions in commercial agreements, reflecting how central this clause is to risk allocation.
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