What is the maximum liability to be paid to client for damages ?

715 votes

When executing agreements, my advice always is to assume the worst and imagine if you breached the contract in some way, what would be the penalty you have to bear? Going by that, the clause seems a bit strong. Also, there is no liability for damages that are not limited to "infringement or misappropriation of a party's intellectual property" - what about safeguarding other violations? However I am unable to advise conclusively as your query does not reveal the context of the agreement or the character thereof. I advise you to get the Agreement vetted by a lawyer once.

LawRato LawRato

566 votes

Question: We may hardly get 5-10 lakh/annum from our recruitment services to client. but the below paragraph says, if there is breach then we have to pay 5 crore. Should i sign this legal agreement? We know this is not possible, but can we have this in our agreement? As this clause may take all our hard earnings of 10-15 years in 1 short. limitations on liability. except for damages or losses arising from infringement or misappropriation of a party’s intellectual property, in no event shall either party be liable to the other for special, consequential, incidental, indirect, punitive or exemplary damages, whether arising in contract (including warranty), tort (including active, passive or imputed negligence, strict liability or product liability) or otherwise, tal aggregate liability to customer under this agreement Maximum of the total amount actually paid by customer for the services in the twelve (12) months preceding the event OR 5 crores giving rise to liability.

Ans: you need not to agree for such agreement with such clauses. Have the opinion from tne lawyer after showing the entire agreement to him.

Advocate Sadanand Naik LawRato