High risk

Uncapped Liability / Unlimited Damages

The contract does not cap creator liability; worst- case financial exposure is theoretically unlimited.

Show it
Look in the limitation of liability, indemnification, or liability section for phrases like "unlimited liability", "no limit on liability", "to the fullest extent permitted by law", "without limitation as to amount", or "liability shall not be capped". The ABSENCE of any aggregate cap, dollar amount, or fee-based limit anywhere in the contract is also a strong signal.
Decode it
Uncapped liability removes the single most important commercial protection a service provider has - certainty about worst-case exposure. Where you have indemnification or damages obligations, the amount payable is not bounded by the engagement fee. Professional indemnity insurance is typically capped at a defined limit; liability exceeding that limit is absorbed personally. Where uncapped pairs with broad indemnity, the combination creates open-ended exposure to third-party claims you may not control.
Fix it
The strongest single move is to add an aggregate liability cap - typically 1-3x engagement fee for the bulk of liability. Where the brand resists a cap: explicitly exclude consequential, indirect, special, and punitive damages (often transforms unmanageable exposure into manageable exposure), narrow uncapped scope to specific creator-controllable warranties (originality, no infringement), or restructure through a corporate vehicle where appropriate.

What it means

This contract exposes you to liability without a defined financial cap. Where you have obligations to pay damages, settlements, or indemnification, the amount payable is not bounded by the engagement fee or any other limit. A single claim can result in financial consequences that exceed your ability to pay.

Uncapped liability removes the single most important commercial protection a service provider has, certainty about worst-case exposure. Professional indemnity insurance is typically capped at a defined per-claim and aggregate limit; liability exceeding that limit is absorbed by you personally. Where uncapped liability pairs with broad indemnity, the combination creates open-ended exposure to third-party claims you may not control. The clause is materially worse when the engagement is high-value, when you contract as an individual rather than via a corporate vehicle, and when consequential or punitive damages are explicitly included.

What to check before you sign

  • ·Is there an aggregate liability cap defined anywhere in the contract?
  • ·Does the clause reference engagement fees, a multiple of fees, or a specific dollar amount as the upper bound?
  • ·Are consequential, indirect, special, and punitive damages explicitly excluded?
  • ·Is the uncapped language narrowed to specific creator-controllable warranties, or open-ended?
  • ·Are you contracting as an individual or through a corporate vehicle with limited liability?
  • ·Does your professional insurance match the scope of potential liability under the contract?

How to fix it

  • moderate

    Add an aggregate cap on creator liability, typically 1-3x engagement fee. Single most important fix in the Liability domain.

  • moderate

    Explicitly exclude consequential, indirect, special, punitive, and exemplary damages from the creator's liability. Even with no aggregate cap, this excludes the largest damage categories.

  • moderate

    Where uncapped exposure must be preserved for specific warranty breaches (originality, no infringement, IP clearances), narrow the uncapped scope to those items only.

  • moderate

    Set the cap at the level of the creator's professional indemnity insurance coverage. This ensures liability matches insurable exposure.

  • harder

    Restructure the engagement to contract through a corporate vehicle with limited liability rather than personally. Practical exposure is bounded by corporate assets.

Negotiating it

A good opening

"Could we cap aggregate creator liability at 2x the engagement fee, exclude consequential, indirect, special, and punitive damages, and confirm the cap aligns with my professional indemnity insurance coverage? "

When to walk away

Uncapped liability combined with broad indemnity, no consequential-damages exclusion, individual contracting (not corporate vehicle), no insurance alignment, and refusal to introduce any cap, is a strong walk-away signal. The structure creates theoretically unlimited personal financial exposure for a single-fee engagement.

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Educational guidance, not legal advice. For high-value or complex deals, consult a qualified solicitor.