Answered question · Dec 21, 2025
Is a liability cap tied only to fees paid (not payable) standard?
An anonymized real-world question about commercial contract risk. This breakdown focuses on practical, commercial impact — not case law, and not a substitute for a full contract review.
Plain-English snapshot
A liability cap tied only to fees paid, especially without exceptions for data protection or confidentiality breaches, is not standard in Sa
Full commercial-risk breakdown
A liability cap tied only to fees paid, especially without exceptions for data protection or confidentiality breaches, is not standard in SaaS agreements. This structure can significantly limit your recourse in case of serious issues.
Key Risks:
- Limited Recovery: If a breach occurs, you may only recover up to the amount you’ve already paid, which may not cover your actual damages.
- No Carve-Outs: The absence of exclusions for data protection or confidentiality breaches means you could face substantial risks without adequate protection.
- Exclusion of Indirect Damages: This limits your ability to claim consequential damages, which can often be substantial in a SaaS context.
Negotiation Guidance:
- Seek a Higher Cap: Propose a cap based on total fees payable over the contract term, not just fees paid, to better align liability with potential damages.
- Request Carve-Outs: Insist on exceptions for breaches related to data protection, confidentiality, and gross negligence to ensure you have recourse for critical issues.
- Consider Indirect Damages: You may want to advocate for inclusion of indirect damages, particularly if they are foreseeable and could arise from a breach.
Not legal advice.
Evaluating a limitation of liability clause?
Small wording changes can materially shift downside exposure. For a fast commercial-risk breakdown, run the clause through the Clarioso Liability Analyzer.