Limitation of Liability Law and Legal Definition

Limitation of liability generally refers to a lessening of risk. Liability is generally a term that refers to a debt or obligation. In a financial sense, it refers to an organization’s or person's debts and other financial obligations. In insurance law, liability often is used to refer to blameworthiness that is used to apportion responsibility for repairing damage caused. Criminal liability involves a determination of intent, unlike civil liability.

Businesses may attempt to use disclaimers on products they sell to avoid liability in situations such a consumer misuse. However, there are warranty laws which may override any disclaimers of liability placed on a product. The following is an example of a commercial disclaimer on a product: "Seller's total liability for any claim, howsoever, arising, shall not exceed the price of the goods supplied by seller to the customer. Seller shall not be liable for any consequential customer loss whether this arises from a breach of duty in contract or any other way. Seller cannot accept liability for a customer's failure to comply with specific instructions as stated on the Internet, i.e., garment wash care instructions. Customer's statutory rights are not effected by this statement."