Limitation of Liability Carveouts: Confidentiality, Data Security Breaches, IP, and Indemnification
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Commercial Law
- event Date
Tuesday, July 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.
This CLE course will examine limitation of liability provisions and how to properly exclude certain types of damages from such disclaimers and/or caps. The panel will discuss typical carveouts on standard disclaimers and caps on liability. The panel will discuss best practices to limit liability for incidental, punitive, indirect, special, exemplary, extraordinary, or consequential damages or lost profits, as well as caps of liability.
Mr. Overly focuses his practice on drafting and negotiating technology related agreements, software licenses, hardware acquisition, development, disaster recovery, outsourcing agreements, information security agreements, e-commerce agreements, and technology use policies. He counsels clients in the areas of technology acquisition, information security, electronic commerce, and on-line law. He is the co-author of A Guide to IT Contracting: Checklists, Tools and Techniques (CRC Press, 2012).
Mr. Allen is a corporate transactional attorney who concentrates his practice on M&A transactions, private placement transactions (both as issuer’s counsel and as counsel to venture capital firms, family offices, and angel investors), corporate and LLC governance and reorganizations, joint venture transactions, and complex commercial transactions in the areas of software licensing, industrial equipment sales, and significant supply, reseller, and distribution agreements.
Ms. Kennedy is a Technology, Transactions, Cybersecurity & Privacy Practice Group member within the firm’s Intellectual Property Department. She provides counsel on structuring and negotiating technology agreements to create strategic and advantageous business relationships between companies. Ms. Kennedy has experience drafting and negotiating commercial agreements, including intellectual property licenses, software-as-a-service agreements, distribution agreements, master services agreements, non-disclosure agreements, and technology transfer agreements. She also has experience structuring and addressing the intellectual property components of mergers and acquisitions and other corporate transactions.
Limitation of liability provisions are standard in almost every contract and are essential in helping the contract parties limit their risk. But these provisions may also contain broad disclaimers and exceptions.
Some exclusions are commonly accepted (as negotiated by the parties) since if certain damages were not excluded or "carved out" of standard disclaimers of and caps on liability, certain breaches of the contract would have either no remedy or a substantially inadequate remedy.
Issues can arise out of "bad conduct" carve-outs in indemnification and other limitation of liability provisions that when not properly drafted can defeat the intended purpose of limited liability provisions. Common practices for limitation of liability provisions also may vary based on the type of contract. For example, contracts for of sales of business may have carveouts to liability limitations that are not commonly found in supply or services contracts.
Listen as our expert panel discusses the types of carve-outs that are typical in limited liability provisions, when such carve-outs should be employed, and what risks can (and cannot) be mitigated.
- Limitation of liability
- Carve-outs
- Confidential information
- Breach of data security obligations
- Intellectual property
- Indemnification
- Restrictive covenants
- Payment obligations
- Bad conduct
- Willful misconduct
- Gross negligence
- Violation of law
- Variations in M&A agreements
- Diminution in value
- Damages based on a multiple
- Fraud
- Materiality scrapes
- Carve-outs
- Best practices
- Commercial agreements
- M&A agreements
- Damages awarded in third-party claims
- "Special damage" caps
The panel will discuss these and other key issues:
- How can parties quantify and exercise control over potential liabilities that have been excluded from a limitation of liability provision?
- What are "bad conduct" carve-outs in indemnification and limitation of liability?
- What are the risks of carve-out language being over-expansive and defeating liability protection?
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