Limiting Liability: Single Global Cap Or Multiple Caps?

Commercial contracts often require goods or services to be provided over several years – so is it better to have a single global limitation of liability for all claims over the life of the contract? Or should you opt for multiple caps, where the limit effectively "resets" for each year of the contract or for each separate claim? A recent case highlights the potential for disputes: whilst the supplier maintained there was a single cap, limiting recovery to £11.5 million, the customer argued for multiple caps, giving it scope to recover over £130 million. We also look at an earlier Court of Appeal case involving a similar dispute over liability caps.

Drax v Wipro: single cap vs multiple caps