• Why this “Limiting Each Party’s Liability” Section starts with with Uncapped Liabilities<endsummary>Most liability caps are phrased as: “Except for x, y, and z, liability is limited to…” That structure can be cognitively harder to parse and reference. By first listing the Uncapped Liabilities, then showing how the remaining liabilities are handled under special or general caps, we mirror how lawyers and contract reviewers typically think about risk. Organizing the clause this way makes it easier to see which risks are never limited, which are capped at a specific amount, and which are covered by the general cap, giving the reader a clearer mental map of how liability is allocated.

• Why we made indemnification (and defense) liabilities uncapped.<endsummary>We treat indemnification obligations as uncapped liabilities because capping them often leads to real-world dilemmas. For example, if the Provider is responsible for defending a claim, what happens when the cap is exhausted? Do they stop midway through litigation or refuse to pay a full settlement? That is not a workable outcome. That is why liabilities under both the “Provider’s Obligations to Handle Service Infringement Claims” and “Customer’s Obligations to Handle Claims Arising from Misuse” Sections are uncapped. This reflects how many parties and courts already interpret indemnity obligations: as commitments to fully defend and resolve a claim, not just up to a dollar limit.

• Why we made breaches of confidentiality uncapped, but not those pertaining to Customer Content.<endsummary>It is common to treat general confidentiality breaches as uncapped liabilities, because misuse of sensitive non-public information (like trade secrets or financials) can cause significant harm and is often difficult to value in advance. But we do not treat breaches involving Customer Content the same way. Most providers cannot take on unlimited liability for breaches involving Customer Content, especially when that content includes sensitive or regulated data.  The potential exposure is too great and too uncertain, even when the data is not regulated. That is why we cover breaches involving Customer Content under the Data Breach Liabilities cap, which offers a realistic but still meaningful layer of protection.

• Why we use the catch-all: “liabilities that cannot be limited by law”<endsummary>Certain types of liability, like those for gross negligence, willful misconduct, or violations of specific statutes, often can’t legally be capped, depending on the jurisdiction. Some agreements list these categories explicitly, but those lists can become incomplete, inconsistent, or legally redundant. Instead, we use a catch-all phrase: “liabilities that cannot be limited by law.” It’s cleaner, more adaptable across jurisdictions, and ensures the agreement doesn’t conflict with any applicable legal limits, without needing to guess which types of liability a court might treat as non-waivable.

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