Liability

US commercial-market reference points; verify against the matter's jurisdiction pack.

Balanced position

Total liability capped at the fees paid or payable in the twelve months preceding the claim, applied mutually, with a short list of carve-outs that are uncapped or subject to a higher super-cap: breach of confidentiality, IP-infringement indemnity, gross negligence or willful misconduct, and (where the deal involves personal data) data-protection breaches under a super-cap of a small multiple of the general cap.

Except for Excluded Claims, each party's total aggregate liability arising out
of or relating to this Agreement shall not exceed the fees paid or payable by
Customer under this Agreement in the twelve (12) months preceding the event
giving rise to the claim. "Excluded Claims" means a party's breach of Section
[Confidentiality], its indemnification obligations under Section [Indemnity],
and its gross negligence, fraud, or willful misconduct.

Common one-sided variants

Tilted toward the provider:

• Cap set at one to three months' fees, or a low fixed dollar amount unrelated to exposure.
• Customer's payment obligations carved out of the cap while every provider obligation sits inside it.
• No super-cap for data or confidentiality breaches in a deal whose whole point is handling sensitive data.

Tilted toward the customer:

• Provider liability uncapped while the customer's is capped.
• Carve-outs that swallow the cap: "any breach of this Agreement," all indemnification obligations, or all confidentiality breaches uncapped.
• Cap measured over the life of the contract's total committed value rather than a trailing period.

Fallback ladder

1. Mutual 12-month-fees cap with the standard carve-out set (preferred).
2. Mutual cap with carve-outs narrowed to gross negligence/willful misconduct and IP indemnity; confidentiality and data moved under a super-cap of 2-3x the general cap.
3. Mutual cap at total fees paid under the agreement, all carve-outs under a defined super-cap, none uncapped except fraud and willful misconduct.
4. Asymmetric caps only where the risk is genuinely asymmetric, documented in the rationale — never silently.

Below rung 4 — an uncapped general liability position for one side only — escalate rather than concede.

Rationale: The cap is the deal's core risk-allocation term; carve-outs are where caps die. Most negotiations resolve at the carve-out list and the super-cap multiple, not the headline cap.