Reviewing a contract with unlimited liability

A contract that says nothing about liability leaves it unlimited: every loss that flows from a breach, for as long as the limitation period runs, recoverable against the whole of the business. So does a contract whose cap has been deleted in negotiation, and so, in practice, does one whose carve-outs cover the claims most likely to arise. What it means depends on the contract, the losses a breach could cause and the insurance in place. I review the contract from the side of the party exposed and return it marked up with a written explanation of the exposure, the insurance position, and the limitation clause the other side will accept, for a fixed fee of £495 in three working days.

Who this is for

Suppliers, consultants, contractors and agencies in England and Wales asked to sign a customer's contract with no limitation of liability, or whose own limitation has been struck out, and customers considering whether to accept a supplier's demand for a cap. Both parties are businesses.

What to look for in a contract with unlimited liability

What unlimited liability means under English law

Without a limitation clause, a party in breach is liable for the losses that flow naturally from the breach and for the losses the parties could reasonably have contemplated at the time of contracting, including loss of profit and business, for a claim brought within six years of the breach under section 5 of the Limitation Act 1980, or twelve years if the contract is a deed under section 8. The review explains what a claim on this contract could reach, which is a function of the customer's business and what the supplier knows about it, not of the contract price.

The contract that looks capped and is not

A cap with wide carve-outs, for breach of confidentiality, data protection, intellectual property, wilful default or 'gross negligence', or with indemnities outside it, caps the small claims and leaves the large ones unlimited. The review reads the cap and the carve-outs together, applying the approach in Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29, where the Supreme Court gave a carve-out its ordinary meaning, and identifies which of the claims likely on this contract fall outside the cap.

Insurance: what it covers and where it stops

A supplier's professional indemnity, public liability, product liability or cyber policy has its own limit, exclusions and conditions, and an uncapped contractual liability above that limit is the business's own money. Policies also exclude liability assumed by contract beyond what the law would impose, so an indemnity or a fitness for purpose warranty may be uninsured however large the limit. The review reads the contract against the business's cover and identifies the exposures the policy does not meet.

What cannot be limited, and what can

Liability for death or personal injury caused by negligence cannot be excluded or restricted under section 2 of the Unfair Contract Terms Act 1977, and liability for fraud cannot be excluded at common law; everything else can be limited by agreement, subject, where the limitation is in a party's written standard terms, to the reasonableness test in section 3 and section 11. The review drafts a limitation that carves out only what must be carved out, with separate caps for data and confidentiality where the other side insists on more than the general cap.

The clause to propose and the positions the other side will accept

A customer that has deleted the cap will accept one in the right form: a stated sum or a multiple of the annual charges, an aggregate cap for the contract term, a separate higher cap for data protection and confidentiality breaches supported by the supplier's cyber insurance, the mandatory carve-outs, and named exclusions of loss of profit, revenue and business. The review drafts the clause, sets the figures by reference to the contract value and the insurance, and gives the supplier the explanation to send with it.

Interest, costs and the claim you did not expect

Unlimited liability includes the other side's legal costs where a court awards them and interest on damages, and, for a commercial debt, statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998. It also includes claims by third parties where the contract lets them enforce it under section 1 of the Contracts (Rights of Third Parties) Act 1999, which the review excludes. Where a customer is reviewing a supplier's request for a cap, the review advises on the figure that protects the customer's likely losses and the carve-outs worth insisting on.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The contract does not mention liability at all. Does that mean it is unlimited?

It does. Without a limitation clause you are liable for all the losses the law allows, including loss of profit and business, for the full limitation period. The review sets out the exposure and drafts the cap to propose.

We have insurance. Does that cover unlimited liability?

Only up to the policy limit and within its terms, and policies exclude liability you assume by contract beyond what the law would impose. The review reads the contract against your cover and identifies what is not insured.

The customer says its standard terms never include a cap. What can we propose?

A cap in a form customers accept: a stated sum or a multiple of annual charges, in aggregate, with a separate higher cap for data and confidentiality, the mandatory carve-outs and named exclusions. The review drafts it and gives you the explanation to send.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a limitation of liability clause
• Reviewing an indemnity clause

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.