by Desislava Stankova | Jan 28, 2015 | Contracting, News and Events
Centuries ago Roman law has been merciless to debtors who have not been able to perform their duties, leading to the loss of personal freedom and disposal of their income. Nowadays, the freedom to contract presents multiple opportunities to divert from the liability burden imposed by law and to enter into agreements which drift away from the statutory regime, by including limitation of liability (LoL) clauses in the contracts. The main reason for drafting LoL provisions is to manage the risk associated with a project, thus facilitating competition and business transactions. However, when LoL clauses are applied to an ICT contract, the specifics of the ICT projects should be carefully considered. Many ICT projects are complex, innovative, and a failure in the successful implementation may affect whole businesses. Having all the risks in mind, the inclusion of LoL provisions in ICT contracts is substantial, for they can encourage more clients and suppliers to enter into contractual relations, reduce the overall project price and arrange the risk sharing in high risk projects. LoL provisions in ICT contracts Generally, the LoL is a provision found in contracts that restricts the amount of damage parties can recover from each other. It is aiming at allocating the project risk and to protect the parties from the uncertainties, associated with the unlimited liability. However, the liability in most legal systems cannot be limited regarding intentional misconduct and the limitation is only applicable as to the parties of the contract and not to third parties that might be in any way damaged, since they are not in contractual relations. According to the Principles of the...
