Liability clauses in contracts
Liability clauses are included in contracts to protect the customer from exposure to loss due to a breach by the supplier. A risk-averse customer may see clauses that impose unlimited liability as protection against a supplier breach, but this comes at a cost: the supplier must take additional steps, either in delivering the project or through risk-financing measures like insurance, to fulfil its obligations, and the additional costs will be included in the price.
Broadleaf has developed a risk-based process for estimating limits of liability that offers:
- Improved insight into the potential sources of loss for the customer
- A common understanding between customers and suppliers of the nature and size of potential liabilities
- Avoidance of costs associated with unnecessarily high limits of liability that deliver little and do not reflect actual risks
- Simpler and faster negotiation of contract terms associated with supplier liability.
For a detailed description of the process for estimating limits of liability, and the outcomes that are generated, please see our associated resource note.
Other contract support
We provide many other forms of contract support, at different stages in the development of a contractual relationship, some of which is described in the case studies listed below.