GlossaryEN1 min readUpdated: Jun 26, 2026

Liability cap clause

Unlike a full exclusion of liability, a liability cap clause limits a party's exposure to damages by setting a contractual ceiling rather than eliminating responsibility altogether.

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://www.lawinsider.com/dictionary/liability-cap-clause

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Logistics Concept

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Definition & Explanation

Unlike a full exclusion of liability, a liability cap clause limits a party's exposure to damages by setting a contractual ceiling rather than eliminating responsibility altogether. The cap is typically expressed as a multiple of the freight or service charge, or as a fixed absolute amount. Carriers, freight forwarders, and airlines use these provisions to keep financial risk predictable; shippers often accept them in exchange for more competitive rates. Statutory liability limits already exist under major transport law regimes – including the CMR for road freight and the Hague-Visby Rules for sea carriage – and contract clauses may adopt or modify those ceilings. Exceptions typically apply in cases of gross negligence or wilful misconduct, and where the shipper has declared a special cargo value.

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