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A limitation of liability clause is a provision in a contract that limits the amount of exposure a company faces in the event a lawsuit is filed or another claim is made. If found to be enforceable, a limitation of liability clause can cap the amount of potential damages to which a company is exposed. The limit may apply to all claims arising during the course of the contract, or it may apply only to certain types of causes of action.
â¢What is a limitations of liability clause. âLimitations of liability attempt to limit, define. or eliminate damages occasioned by a. parties conduct or breach of contract. Limitation of Liability. Clauses.