How should a freelancer limit liability in a contract?

With a limitation of liability clause: a numbered cap, a list of losses you do not pick up, and a short list of things the cap cannot touch. The usual freelance cap is the fees paid, or payable, in a named period, or the total fees under the contract. Pick a figure that matches the job, not a number copied from an enterprise MSAmaster services agreementA master services agreement (MSA) sets the legal terms for an ongoing relationship, with each project then agreed in a separate statement of work.More in the glossary.

The clause does two jobs:

• A ceiling. The most you can be asked to pay if the work goes wrong.
• A filter. Indirect lossconsequential lossConsequential loss is the second limb of remoteness in Hadley v Baxendale (1854) 9 Exch 341: loss that was not the usual result of the breach, but that both sides contemplated when they contracted. English commercial papers often exclude "indirect or consequential loss". That phrase does not automatically cut out loss of profit. Name the heads you mean.More in the glossary and loss of profit are often excluded, so a delayed logo does not become a claim for a missed launch.

Some liabilities usually sit outside the cap: fraud, and — in England and Wales — death or personal injury caused by negligence, which you cannot exclude. See the clause page for the worked example, and What an indemnity clause actually moves if the client’s paper asks you to indemnify them as well.

Liability for death or personal injury caused by negligence cannot be excluded or restricted by a contract term. Other negligence liability can be limited only so far as the term is reasonable. Consumer contracts are carved out to the Consumer Rights Act 2015. That is the Unfair Contract Terms Act 1977, section 2.

For a business-to-business freelance job, the practical reading is:

• do not write “we have no liability for anything”
• do write a cap, and say it does not apply to death or personal injury caused by negligence, or to fraud
• treat a consumer client — a couple booking a wedding film, a private portrait — as a different paper. Fairness rules sit on that side. We do not reprint the Consumer Rights Act list here.

Reasonableness is a fact-sensitive test. We do not invent a safe number. A cap of the fees on a £2,000 brand job is a different conversation from a cap of the fees on a six-figure build that takes a live payments site down. Match the cap to the risk, then get the other side to sign it.

This section is England and Wales. If the contract names another place, read that place’s page under /law rather than copying this paragraph.

Pick a figure you could actually pay, tied to money the client is paying you. Common shapes, none of them a rule:

• the fees paid or payable in the 12 months before the claim
• the total fees under the contract
• a named sum

Say whether the cap is per claim or for all claims together. Say whether it is the same for both sides. A mutual cap is easier to defend in a negotiation than a one-way ceiling that only protects the client.

Insurance sits next to the cap, not instead of it. If you hold professional indemnity insurance, the cap and the cover should be able to live together. We do not quote market premiums or claim that a given policy will pay.

If the client’s paper sets the cap at a large multiple of fees, or at “uncapped for any breach,” that is a redlineredlineA redline is a proposed edit on a draft contract — words added, struck out or rewritten — not a signed change.More in the glossary. Counter with a fees-linked figure and the statutory carve-outs. Your client redlined your contract is the process page.

An indemnity is a promise to pick up a named loss, often the client’s loss if a third party sues them over the work. If the indemnity sits outside the limitation clause, it can punch a hole in the cap. Read the two clauses together.

For ordinary freelance work, keep indemnities narrow: IP you created, confidentialityconfidentialityConfidentiality is a promise to keep shared information private and to use it only for the agreed purpose.More in the glossary you broke, not “any claim arising out of the services.” And say the indemnity is subject to the cap, unless you have a reason to leave a specific indemnity uncapped.

The indemnity blog post is the longer explainer. The clause pages for indemnity and limitation of liability are the wording.

A consulting agreement should not indemnify the client for following the advice. You advised; they decided. A freelancer agreement or services agreement can indemnify for IP in the deliverables you actually made, on payment, without turning you into their insurer.

Example

Each party's total liability arising under or in connection with this agreement will not exceed the fees paid or payable in the 12 months before the claim arose. Neither party will be liable for indirect or consequential loss or loss of profit. Nothing in this agreement limits liability for death or personal injury caused by negligence, or for fraud.

In Plain English: the most either side pays is what was paid, or owed, in the year before the problem. Neither side pays for knock-on losses or lost profit. The cap does not apply to death or injury caused by carelessness, or to fraud.

Put that next to warranties that you will do the work with reasonable care, and next to payment terms so the fees the cap refers to are real numbers. In England and Wales a business-to-business services contract already implies reasonable care and skill; the warrantywarrantyA warranty is a promise that something is true, such as “this work is original” or “we have the right to grant this licence.”More in the glossary is how you keep that promise in the paper.

Do not add marketing claims about the clause being always enforceable. Reasonableness still applies to negligence. Get the client to sign the same version you mean, on one link, rather than leaving the cap in an unsigned appendix.

On Contracts.io the cap is a clause on the same contract as the fee, not a schedulescheduleA schedule is an annex to the contract that holds the detail: fees, dates, deliverables, service levels. It is part of the agreement if the main body says so. An order-of-precedence line should say what happens if the schedule and the clauses collide. Swap a schedule only by the variation method the contract names.More in the glossary the client never opened. Describe the job in a sentence. Lex drafts a freelancer agreement, consulting agreement or services agreement. You share one link. The client can Accept, Counter or Decline on the cap, then both of you e-signe-signatureAn e-signature is any electronic way of showing agreement to a document, such as a typed name, a drawn signature or a click.More in the glossary. The other side never pays and does not need an account.

That is how a fees-linked cap survives contact with their paper. You see the redline. You counter on the same version. Start from the AI contract generator or the contract generator. Free £0, then paid plans from £15 a month — see /pricing.

Try it on contracts.io: put a fees-linked cap on the same contract as the job, and e-sign the version that still has it.