Limitation of Liability Clauses in Business Contracts: Limiting Potential Damages and Avoiding Pitfalls

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Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Commercial Law
- event Date
Tuesday, April 16, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Live Online
On Demand
This CLE webinar will guide business counsel in drafting and negotiating appropriate limitation of liability (LOL) clauses in business contracts. The panel will discuss critical considerations when crafting these provisions, enforceability challenges, the interplay of LOL clauses with indemnification provisions, and the use of conditions that must be met for the limitation to be enforceable.
Faculty

Mr. Davis helps clients navigate the development and construction process, from negotiating complex design and construction agreements to resolving disputes through both informal and formal dispute resolution processes. He has experience representing clients in arbitration and other alternative dispute resolution forums – both domestic and abroad – and in federal and state courts. Mr. Davis represents clients across various industries, including construction, real estate, technology, hospitality, energy, healthcare, financial services, and insurance. His role in the firm's Construction and Design practice group is marked by his proficiency in drafting and negotiating project agreements and resolving disputes through a business oriented, goal-minded approach. Mr. Davis has contributed to high-stakes cases, ranging from federal civil rights actions to nine-figure construction disputes. He has earned recognition in the legal community as a member of a nationally ranked practice group and through his selection as a Rising Star in Business Litigation by Super Lawyers. Mr. Davis regularly writes for the Stoel Rives Ahead of Schedule blog and other publications, offering insights on current legal issues and trends.

Mr. Johnson is widely recognized as one of the go-to fiduciary litigators in Texas. His practice focuses on trust, estate, and closely-held business disputes. A frequent writer and speaker, David is known around the state as a thought leader in the fiduciary area. Mr. Johnson’s experience in trust and estate disputes includes will contests, elder abuse, mental competency, undue influence, trust modification/reformation/clarification, breach of fiduciary duty and related claims. Additionally, he has a transactional practice for trust departments in providing legal opinions on the construction of trust documents, documenting release and consent agreements, resignations, successor appointments, modification of trusts, trust mergers, trust severances, etc.
Description
The LOL clause can operate to limit a company's direct, indirect, consequential, special, and incidental damages in the event of a claim arising out of the company's contractual relationship. LOL provisions may cap damages at either an amount agreed upon by the parties, the contract amount, or the parties' insurance coverage limits. The clauses may also expressly exclude certain types of damages.
Courts routinely scrutinize LOL provisions to ensure that they are not ambiguous, unconscionable, unfairly negotiated, or in violation of a state statute or public policy. LOL clauses that were not explicitly drafted or fairly negotiated may be held unenforceable. Likewise, enforcing LOL clauses when the performing party does not maintain its insurance or meet other conditions can result in unintended (and harsh) results.
Listen as our authoritative panel explains best practices for drafting and negotiating LOL provisions in business agreements. The panel will provide strategies for avoiding common negotiation pitfalls, anticipating and overcoming enforcement hurdles, and reconciling LOL provisions with indemnification clauses.
Outline
- Drafting considerations and best practices for LOL clauses
- Enforceability challenges with LOL clauses
- The interplay of LOL clauses with indemnification provisions
- Tying enforcement of LOLs to key performance conditions
Benefits
The panel will review these and other high priority issues:
- What should business counsel consider when drafting and negotiating LOL provisions in contracts?
- What are the enforceability challenges for parties seeking to invoke an LOL clause?
- What is the interplay between LOL clauses and indemnification provisions in business agreements?
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