Is a provision limiting the software vendor’s liability acceptable?
Typically, the software vendor’s liability will be limited to a set dollar amount. Often, this amount equals the fees you pay the software vendor. However, it is not unusual to see the amount limited to 12-months worth of fees. Although a limitation on the vendor’s liability is reasonable, there are certain types of claims that should not be limited. These types of claims include (i) claims by a third-party that the software infringes the third-party’s intellectual property rights, (ii) claims arising from any personal injury or property damage caused by the software vendor while on your premises and (iii) claims arising from the software vendor violating the confidentiality provisions of the license agreement.
