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ARTICLE · 16 APRIL 2025

Exclusion And Limitation Of Liability Clauses

The distinction between exclusion and limitation of liability is, in essence, a matter of degree rather than substance.

BahrainCorporate/Commercial Law

Exclusion and limitation of liability clauses serve as essential mechanisms for allocating risk between contracting parties and promoting commercial certainty. Nevertheless, the doctrine of freedom of contract must be reconciled with considerations of public order, as enshrined in applicable legal provisions. Under Bahraini law, the general rule permits parties to exclude or limit the liability of the debtor through contractual agreement, except where otherwise restricted by law and subject to specific conditions set forth therein. It is important to note that numerous exceptions to this principle exist, scattered across Decree Law No. 19/2001 Issuing the Civil Code (the "Civil Code") and various sector-specific legislations. Accordingly, the validity and enforceability of such clauses must be evaluated on a case-by-case basis. This article aims to examine the legal distinction between exclusion and limitation of liability clauses, along with the requisite conditions

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