In the first of a series examining common contractual issues Conor Folan of Fieldfisher Ireland’s Commercial team looks at why it is important for businesses (and individuals) to limit their potential liability in commercial contracts and provides practical tips for the best ways to do so.
Why is it so important to limit your liability?
Every commercial transaction carries a risk of liability. Performance of the contract can give rise to a range of legal liabilities, including for example breach of contract, negligence, misrepresentation, infringement of intellectual property rights, breach of statutory duty, regulatory offences and defamation. In the absence of an effective limitation of liability clause, there is no financial limit on the damages a counter party can recover from your client. At the very least this could lead to financial pain and in a worst case scenario it could put your client out of business entirely. For these reasons, it is very important to ensure that commercial contracts include some form of limitation, and that these limitations are both effective and enforceable.
The full article, including a step by step approach for parties to analyse and address the issues, is contained in the News & Insights section of the website at the following link.