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Is it possible to limit liability by contract?

Is it possible to limit liability by contract?

  • February 4, 2014
Is it possible to limit liability by contract?

The well-established legal basis in Quebec regarding contracts is the principle of freedom of contract. The legislator in Quebec decided to intervene as less as possible in order to allow individuals and companies to dictate the content of their contract as they wish, and to lay down the terms they want. However, as extreme freedom could result in an imbalance of power between the parties and could cause inequalities, limits have been prescribed by legislation.

For this reason, even if it is agreed in a contract that your counterparty is not responsible for any damages you may incur, the law provides for certain cases where the contractual liability limitation is ineffective. For example, in cases where there are corporal and moral damages, your counterparty could not rely on the limitation clause to exonerate himself or herself. Furthermore, in situations where there is gross negligence or willful misconduct, limitation of liability would not save the other party from his or her mistake. These are only two examples of many limits set by law.

Be advised that a limitation of liability clause cannot stop you from pursuing the author of wrongdoing.

*This does not constitute a legal opinion.

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