Limitation of remedies

US commercial-market reference points; verify against the matter's jurisdiction pack — the enforceability of damages waivers, liquidated damages, and shortened limitations periods varies by jurisdiction.

Balanced position

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.

Common one-sided variants

Tilted toward the provider:

• One-way waiver: the provider's consequential damages excluded while the customer's exposure (e.g., for payment or misuse) is unlimited in kind.
• "Lost profits, lost revenue, loss of data" listed without the "to the extent consequential" qualifier — quietly excluding direct damages, since lost profits can be direct.
• An exclusive remedy (service credits only) with nothing behind it when the remedy fails of its essential purpose.

Tilted toward the customer:

• Damages waiver deleted entirely in one direction, or every customer claim carved out of it.
• Liquidated damages that operate as penalties rather than a genuine pre-estimate of loss — enforceability varies by jurisdiction; qualify.
• Third-party beneficiary or covenant-not-to-sue provisions giving one side's affiliates enforcement rights with no reciprocity.

Fallback ladder

1. Mutual waiver, lost profits qualified as consequential-only, carve-outs mirroring the cap, equitable relief preserved (preferred).
2. Accept an unqualified lost-profits exclusion only if direct damages are expressly preserved elsewhere in the section.
3. Accept exclusive remedies (e.g., SLA credits for availability) where a termination-plus-refund backstop exists for chronic failure.
4. Accept liquidated damages only where the amount is a documented, genuine pre-estimate of loss and is the exclusive remedy for that breach alone.

Below rung 4 — a one-way waiver or an exclusive remedy with no backstop — escalate.

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.