Nevertheless, I see it more often in service contracts that involve the processing or storage of personal data, especially staff. For example, in the software vendor`s case study, the clause limits claims to third-party IP claims about the software contractually provided to the customer. The supplier shall cover losses related to the claim. However, the clause does not cover the client`s attorney`s fees. Therefore, the clause means that, although you compensate, you do not extend its scope to any type of loss. Whether compensation is included in a commercial contract is a matter of commercial policy that may be influenced by practice in the sector concerned. For example, the standard terms for the appointment of Anderson Law LLP do not require clients to exempt the firm from third-party claims arising from the use of legal advice that the firm provides to the client. If there is a compensation clause, the person awarding the compensation is designated as the indemnitee. The person covered by the compensation is designated as the indemnity party. Liability may be limited in one of two ways: (1) a limitation of the compensation itself; or (2) a general limitation of contract liability.
There is no general rule as to whether a clause limiting liability applies to compensation, it is the interpretation that counts every time. An example of this is that restrictions on “all rights under the contract” could relate to a right to compensation, since compensation is a contractual obligation to pay money. On the other hand, a limitation on “damages” could give rise to controversy as to whether such compensation creates an obligation for damages. From time to time, we are happy to deal with critical issues in supplier agreements that a trader should pay attention to.. . .