Legal Question in Business Law in California

Re: Limitation of Liability

This is the kind of clause that a vendor seeks to include and the buyer seeks to exclude.

It basically means that if you suffer any damages from the use of the intellectual property you cannot sue the vendor.

Re: Limitation of Liability

Comments: (1) A "standard" clause in my thinking is one that is not unusual or contains generally accepted language. This clause is not unusual and contains a variation of a form of language often seen in various contracts. Having said that, most contract clauses are subject to negotiation as to whether they are included at all and what they actually say. (2) The purpose of this clause is basically to pare down potential liability to the minimum (usually the cost of the product for example). Otherwise, when people sue, they ask for damages such as those that resulted from use of the product. By way of example, "because the software didn't work properly during this time period, I'm sure we lost a lot of clients and that is worth millions." (3) Your concern about defending your intellectual property should be focused on the rest of the agreement. This clause has to do primarily with damages and not respect for and defense of IP rights. There should be other provisions that specifically address those concerns. An attorney would need to review the rest of the agreement to determine whether your IP rights have been adequately addressed. For example, I would expect to see a provision that promises that the other party will not attempt to obtain or distribute your source code and that they will take adequate measures to protect your work.