Limitation of Liability

A limitation of liability clause caps or excludes what a firm will pay when something goes wrong. The usual shape excludes indirect and consequential loss, excludes loss of profit and lost opportunity, and disclaims responsibility for failures originating with third parties the firm relies on — price feeds, connectivity, payment providers, data centres. Read plainly, it says that most of what a client would describe as their loss is not the kind of loss the contract will pay for. The part that is easy to miss is that the clause is not the last word. Regulators generally do not allow a firm to contract out of liability for breaching the rules it is authorised under, so the agreement and the rulebook can say different things about the same failure, and which prevails is decided under the law named elsewhere in the same document rather than by the clause asserting itself. That makes the clause a statement of the firm's starting position rather than a settled outcome, and it makes the governing-law clause the one that determines how much of it survives.