Remedies reference: mutual consequential-damages waiver preserving direct lost profits, cap-matched carve-outs, sparing exclusive remedies with backstops, non-punitive liquidated damages, on the fixed schema. Read when reviewing remedy limits or damages waivers.
Limitation of remedies
Topic: Limitation of remedies — exclusive remedies, damages waivers,
liquidated damages.
Contract type: All commercial agreements.
Jurisdiction: US commercial market; verify against the matter's
jurisdiction pack — the enforceability of damages waivers, liquidated damages,
and shortened limitations periods varies by jurisdiction. Positions are
firm-configurable defaults overridable via .dochaus/profile.md.
Preferred
A mutual waiver of consequential, incidental, special, and punitive damages, with lost profits excluded only to the extent they are consequential — direct damages remain recoverable. The waiver carries the same carve-outs as the liability cap (confidentiality, indemnity obligations, gross negligence, willful misconduct). Exclusive remedies are used sparingly and always with a backstop if the remedy fails of its essential purpose. Equitable relief is preserved for confidentiality and IP breaches.
Except for Excluded Claims, neither party shall be liable to the other for
any consequential, incidental, indirect, special, or punitive damages, or for
lost profits to the extent they constitute consequential damages, arising out
of or relating to this Agreement, even if advised of the possibility of such
damages. Nothing in this Section limits either party's right to seek
injunctive or other equitable relief for breach of Section [Confidentiality]
or infringement of its intellectual property.
Off-market variants to watch. Provider-favorable: one-way waiver (provider's consequential damages excluded while the customer's exposure is unlimited in kind); "lost profits, lost revenue, loss of data" listed without the "to the extent consequential" qualifier, quietly excluding direct damages; an exclusive remedy (service credits only) with nothing behind it when the remedy fails of its essential purpose. Customer-favorable: damages waiver deleted in one direction or every customer claim carved out; liquidated damages operating as penalties; third-party-beneficiary or covenant-not-to-sue provisions giving one side's affiliates enforcement rights with no reciprocity.
Fallbacks (ordered)
- Offer when the counterparty wants a flat lost-profits exclusion: accept an unqualified lost-profits exclusion only if direct damages are expressly preserved elsewhere in the section.
- Offer when the provider proposes SLA-credit remedies: accept exclusive remedies (e.g., SLA credits for availability) where a termination-plus-refund backstop exists for chronic failure.
- Offer when the counterparty proposes liquidated damages: accept them only where the amount is a documented, genuine pre-estimate of loss and is the exclusive remedy for that breach alone.
Walk-away floor
A one-way damages waiver, or an exclusive remedy with no backstop when it fails of its essential purpose.
Escalation trigger
At or below the floor, do not concede. Route to the supervising lawyer for
the matter (or the .dochaus/profile.md Escalation Rules contact) before
accepting an asymmetric waiver or an unbacked exclusive remedy.
Rationale: Remedy limitations decide what a breach actually costs; the lost-profits qualifier and the failure-of-essential-purpose backstop are the two details that change outcomes most.