Limitation of Liability
Contract Type:
Generic Contract
Jurisdiction:
The Client agrees that the total liability of the Solicitor to the Client in respect of all claims arising under or in connection with this Agreement, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, shall not exceed £[X]. The Solicitor shall not be liable to the Client for any loss of profit, loss of business, depletion of goodwill or similar losses or for any special, indirect or consequential loss or damage of any nature whatsoever. This clause shall not exclude or limit the liability of the Solicitor for: (a) death or personal injury caused by the Solicitor's negligence; (b) fraud or fraudulent misrepresentation; or (c) any other act or omission for which liability may not be excluded or limited under applicable law.
Explanation
Here is a plain English explanation of the Limitation of Liability clause:
- This sets a cap of £[X] on the total amount the Solicitor would have to pay the Client for any issues with the contract.
- The cap applies whether the liability is due to breach of contract, negligence, breaching regulations, or other causes.
- The Solicitor has no liability to the Client for indirect financial losses like lost profits or goodwill.
- The Solicitor also has no liability for any indirect, special, or consequential losses of any kind.
- However, the cap does not apply and full liability remains for the Solicitor causing death/injury by negligence.
- Also, the cap does not limit liability for fraud or false representations by the Solicitor.
- Finally, if the law does not allow a cap for a particular type of liability, it cannot be excluded.
- Overall, this protects the Solicitor from disproportionate liability exposure while retaining responsibility for serious misconduct.
The limitation of liability clause traces its origins back to the emergence of negligence doctrine in English common law.
In the 19th century, negligence liability for professionals like solicitors was established through court decisions. This exposed them to potentially extensive damages.
To mitigate risks, English solicitors began inserting liability caps and waivers in client contracts. By the late 1800s, limitation clauses were an accepted practice, upheld by court rulings. This allowed solicitors to define maximum exposure.
Limitation clauses proliferated as liability insurance became common for English professionals in the early 20th century. Insurers required these clauses to cover solicitors, further entrenching their use.
Post-war legislative reforms like the Unfair Contract Terms Act 1977 later restricted the scope of limitation clauses. This prevented abusive waivers while permitting reasonable caps tied to compensation.
Today, English law upholds limitation clauses as long as they satisfy principles of reasonableness and transparency. Centuries of case law have shaped modern rules.
Over time, limitation of liability clauses evolved from a judicially sanctioned defense for Victorian solicitors to a regulated but accepted risk management tool, balancing professional liability and client protection.
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