The limitation of liability clause sets out limits on the parties’ obligations to pay the other party for losses arising from the agreement, and as a result should be reviewed carefully. The limit can be total (e.g. ‘not liable for any claims’) or partial (e.g. ‘not liable for indirect damages’), and can contain exceptions to the limits. The clause may also contain a monetary cap on liability (e.g. 50% of what was paid under the agreement). The limitation might apply to one or both parties, or be different for each party and tend to be ‘stacked against’ the party with weaker bargaining power.Some limitation clauses also include indemnity provisions. An indemnity is a promise by one party (the indemnifier) to pay all costs of all claims made against the other party (the indemnitee) arising out of the agreement. This can be very costly, and liability limitations do not necessarily apply to indemnities.In one-sided contracts where the corporation seeks to avoid all liability whatsoever (e.g. Privacy Policy, Terms of Use) the limitation of liability clause will often ask the other party to ‘acknowledge’ this limitation. This is an effort to show that the other party was aware of this limitation of liability clause and agreed to it.