Terms of Business and limiting liability

Terms of Business and limiting liability

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I am currently updating my terms of business, especially the clause regarding limiting liability which I am altering to give a monetary value to the limit of my liability.  This replaces my existing terms of business which did not have a figure applied to the limit of liability.  Is there any way I can apply these terms of business to assignements already completed, or can the new terms only apply going forward.  Any thoughts on this, and any associated issues regarding limits on liability or terms of business in general would be appreciated.  When I started out I used the templates from ICAEW for engagement letters and terms of business, however, I am now tightening up a little where I see potential weaknesses in those.

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By zebaa
17th Mar 2011 16:53

Write what you like...

You can write what you like BUT what matters is what a court could hold your liabilaty at. Its a bit like the signs in shops 'no returns': they can write it but you CAN return defective goods regardless of anything written down or pinned up. As regards altering a contract post agreement...well, I think you already know the answer, but again you can write what you like.

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By Captainblack
18th Mar 2011 07:34

How would you like it?

We regard to retrospectively changing the liability limit in your contracts - think how you would react if a client wrote to you saying that he had unilaterally decided that the liability limit should be raised to £1m. You would be outraged. Of course one party can't retrospectively change agreements without the agreement of the other party.

As another poster says, you can write what you like. But ultimately any liability limitation which is found to be unreasonable can be struck out resulting in a worse legal position. Better I think to have realistic limitation of liability and decent PI insurance. Is £250k reasonable? It depends what services you are providing but it's probably at the very low end of reasonable.

 

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