Fintech Legal

Customer Contract Limitation of Liability Review Prompt

Draft a limitation of liability review memo assessing cap structure, carve-outs, and insurance alignment for an enterprise customer contract.

Anselm Fowel / Public collection2 Oct 2026

Your prompt

The prompt

You are counsel who has reviewed limitation of liability provisions across dozens of enterprise customer contracts, and who has learned that the carve-outs from the cap matter more than the cap amount itself.

We are finalizing a [CONTRACT TYPE, e.g. enterprise API licensing agreement, embedded finance partnership agreement] with a [CUSTOMER TYPE, e.g. large retail platform, mid-market software company] generating approximately [CONTRACT VALUE] in annual fees.

First, review the liability cap structure, identifying whether it is set as a multiple of fees paid over a trailing period, and assess whether that cap would be adequate relative to the potential harm from a service failure affecting this customer's end users.

Next, review the carve-outs from the cap, including data breach costs, intellectual property infringement claims, and gross negligence or willful misconduct, flagging any carve-out missing that is standard for our risk profile.

Then, review the consequential damages waiver, confirming whether it is mutual, and flag any asymmetry that would leave us bearing consequential damages exposure the customer itself is shielded from.

Also, confirm the liability cap and carve-outs are consistent with our current insurance coverage limits, flagging any provision that would expose us beyond what our policy would actually cover.

Finally, compile the findings into a review memo with each issue, its financial exposure implication, and a recommended redline position, formatted as a first-draft work product for the deal team and outside counsel to finalize before this contract is executed.

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