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Draft a limitation of liability clause
Describe the deal and your side, and get a liability cap, a damages exclusion and carve-outs sized to the contract, with each choice explained.
River drafts a limitation of liability clause for the contract you are working on: a cap on each side's total liability, an exclusion of indirect and consequential damages, and the claims that should sit outside the cap. Tell it the deal, the fees and which side you are on, and it sizes the cap to the contract and writes it in your contract's own defined terms.
A liability clause has three moving parts, and most problems come from how they interact. The exclusion removes categories of loss such as lost profits. The cap limits whatever is left. The carve-outs decide which claims escape both, typically confidentiality breaches, indemnities, fraud and willful misconduct. River explains each choice in a line, so you can negotiate it rather than simply accept it.
Courts generally enforce negotiated caps between businesses, with limits. Many states will not let a party limit liability for its own fraud or intentional wrongdoing, some extend that to gross negligence, and consumer contracts face stricter rules. River drafts for business-to-business contracts and flags anything a lawyer in your state should check.
How to size a liability cap
The most common cap ties liability to fees, often the amount paid or payable in the twelve months before the claim. It scales with the deal and is easy to explain. A fixed dollar cap suits one-time projects. A greater-of formula, such as the greater of $100,000 or twelve months of fees, protects a customer when the contract itself is small.
A higher cap for specific claims, often called a super-cap, is the usual middle ground for serious risks. Instead of leaving data breaches uncapped, the parties agree a larger limit for them, such as two or three times annual fees, sometimes tied to the vendor's insurance. Unlimited liability is usually kept for fraud, willful misconduct and, in many contracts, indemnity for intellectual property claims.
Read the clause against the rest of the contract. The exclusion can matter more than the cap: if the loss you fear most is lost revenue, an exclusion of lost profits removes it before the cap is ever reached. Check the defined terms the clause relies on, such as fees, claims and losses, and set it in capitals or bold so nobody can later say it was hidden.
How it works
Describe the deal
The contract, the fees, the risk you worry about, and which side you are on.
River drafts the clause
A cap, an exclusion and carve-outs, written for your side and your contract.
Read the reasoning
A short note explains each choice and what the other side may push back on.
Negotiate in chat
Ask for a fallback position, a reply to their markup, or the other side's version.
What you get
- A cap sized to the fees and the risk, with the formula explained
- An exclusion of indirect and consequential damages, with the examples spelled out
- Carve-outs for the claims that should not be capped, chosen for your side
- A higher cap for data or confidentiality claims when an unlimited one is not workable
- Wording that fits your contract's defined terms and section numbers
Common questions
What is a reasonable liability cap?
For services and software, the fees paid or payable in the twelve months before the claim is the most common starting point. One-time projects often use the total contract price. A customer on a small contract may ask for a greater-of formula with a dollar floor. The right number depends on the risk the work creates, not only on the price.
Should the cap be mutual?
Usually, yes. A mutual cap is easier to agree and looks balanced. The amounts and carve-outs can still differ by side: a customer's payment obligations are rarely capped, while a vendor may accept a higher cap for data breaches. River writes the clause from your side and notes what a fair version for both sides would look like.
What should be carved out of the cap?
Common carve-outs are fraud, willful misconduct, breaches of confidentiality, indemnities for third-party claims, and the customer's duty to pay. Each carve-out widens exposure, so keep the list short and specific. A higher cap for a risky category is often easier to agree than removing it from the cap entirely.
Do caps work in consumer contracts?
Less reliably. Consumer protection laws in many states limit how far a business can restrict its liability to individuals, and some losses, such as personal injury caused by negligence, often cannot be excluded at all. This tool is built for business-to-business contracts; have a lawyer review any consumer terms.
Is this legal advice?
No. River drafts the clause from what you describe and explains its choices, but it does not give legal advice or promise how a court in your state would apply the clause. For large contracts, regulated data or uncapped exposure, have a lawyer review it before you sign.
Draft a limitation of liability clause
Describe what you need, add any files you have, and your workspace opens with the work already underway.