Limitation of liability in outsourcing


Published by a UUÂãÁÄÖ±²¥ Commercial expert
Practice notes

Limitation of liability in outsourcing


Published by a UUÂãÁÄÖ±²¥ Commercial expert

Practice notes
imgtext

This Practice Note identifies and explains key considerations relevant to negotiating and drafting limitation of liability clauses in information technology and business process outsourcing agreements.

It covers the following:

  1. •

    Legal principles

  2. •

    Approaches in outsourcing

  3. •

    Heads of losses

  4. •

    Specific provisions in the agreement

  5. •

    Dealing with data protection liabilities

  6. •

    General considerations

For detailed guidance on the exclusion and limitation of liability in commercial contracts generally, see Practice Note: Exclusion and limitation of liability, and for practical negotiating and drafting guidance, see: Drafting and negotiating a limitation of liability clause—checklist.

For an example limitation of liability clause, see Precedent: Limitation of liability clause.

Legal principles

A contract term which excludes or limits liability is subject to both statutory and common law controls, with the majority of the key statutory restrictions found in the Unfair Contract Terms Act 1977 (UCTA 1977).

The courts are, however, generally reluctant to interfere with commercial deals struck between sophisticated businesses. Some concern arose among suppliers following a number of IT cases in the 1990s in which the courts took

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:

Popular documents

Scotland—the process for applying for sequestration

Scotland—the process for applying for sequestrationSequestration in Scotland is the legal process by which an insolvent debtor’s estate is gathered in, realised and then distributed among their creditors by a trustee appointed for that purpose. The process requires that a formal award of

What is the difference between an appeal and a review?

What is the difference between an appeal and a review?What is an appeal?An appeal in insolvency proceedings is no different to an appeal in normal litigation. An appeal will be allowed only if the appeal court is satisfied that the decision of the lower court was 'wrong' or 'unjust because of a

Financial clean break orders in family proceedings

Financial clean break orders in family proceedingsDuty of the court to consider a clean breakAlthough there is no presumption in favour of there being a financial clean break between parties on divorce, the court is under a duty to consider whether it would be appropriate to exercise its powers so

Late payment penalties—inheritance tax

Late payment penalties—inheritance taxWhile interest often accrues on overdue tax, the late payment of certain taxes may also attract a penalty. For information on the interest accruing on overdue tax, see Practice Notes: IHT—payment deadlines on death—Interest on IHT and Interest on late paid