A contract provision that caps or restricts how much one party can be held financially responsible for if something goes wrong.

These clauses often appear in service agreements, construction contracts, software terms, equipment rentals, and other business deals. A clause might limit damages to the amount paid under the contract, exclude consequential damages, or bar recovery for lost profits. Some are broad; others only apply to certain kinds of harm. Whether a court enforces one usually depends on the contract language, the bargaining power of the parties, and whether the clause conflicts with public policy. In New York, courts often enforce clearly written clauses in commercial contracts, but they are less likely to protect a party from gross negligence, reckless conduct, or intentional wrongdoing.

For someone dealing with an injury, the practical effect can be harsh. A business may point to a limitation clause to argue that even if it made a mistake, the money available is tightly capped. That can shape settlement value, insurance disputes, and who may still be sued under negligence or indemnification theories. In New York injury cases, these clauses do not erase outside legal duties, and they do not override rules like the no-fault system's serious injury threshold under Insurance Law § 5102(d). If a public agency such as the MTA is involved, separate procedural rules can matter too, including the 90-day notice of claim deadline under General Municipal Law § 50-e.