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Limitation of Liability

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M8R-y9bgtd

Junior Member
I'm reviewing a agreement involving me, and two other parties, all in California. The other two parties are extending an option to an exclusive license of intellectual property.

The contract has a limitation of liability section which seems to completely remove my ability to defend the intellectual property.

Is this really a standard clause?

I'm particularly nervous because this section also appears to have been drafted by hand as it contains a misspelling.

I've removed the names of the three groups to avoid embarrassment, and included this below.

Thank you for your help!

" TO THE MAXIMUM EXTENT PERMITTED BY LAW, IN NO EVENT WILL [group1] OR [group2] BE LIABLE TO [my group] FOR ANY INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES OF ANY KIND, LOST GOODWILL, LOST PROFITS, LOST BUSINESS AND/OR ANY INDIRECT ECONOMIC DAMAGES WHATSOEVER REGARDLESS OF WHETHER SUCH DAMAGES ARISE FROM CLAIMS BASED UPON CONTRACT, NEGLIGENCE, TORT (INCLUDING STRICT LIABILITY OR OTHER LEGAL THEORY), A BREACH OF ANY WARRANTY OR TERM OF THIS AGREEMENT, AND REGARDLESS OF WHETHER [group1] WAS ADVISED OR HAD REASON TO KNOW OF THE POSSIBILITY OF INCURRING SUCH DAMAGES IN ADVANCE. "
 


VeronicaLodge

Senior Member
that is an extremely standard clause and while you dont have to sign anything you dont want and can negotiate anything, I don't expect they will be wiling to remove it. that exact clause is in all the contracts my company does.
 

M8R-y9bgtd

Junior Member
Doesn't this clause negate every other obligations made in the agreement, such that Group 1 and Group 2, can perform willful and fraudulent conduct?

If not, then how would my group enforce the contract?

If this is correct and if this remains in the contract then in reality the contract consists of this claim, and a list of claims my group is supposed to abide by. Is that correct?

Thanks again!
 

VeronicaLodge

Senior Member
there is no limitation in that clause based on wilfull or fraudulent conduct that i can see.

however, in rereading it, i did notice something, i would delete the part that says "A BREACH OF ANY WARRANTY OR TERM OF THIS AGREEMENT"

good luck
 

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