Uncapped Liability: A $2,000 Logo Project Shouldn’t Expose You to Six Figures
Your liability is unlimited while the contract is silent about theirs — in an extreme case a $2,000 logo project could expose you to a six-figure claim. Fix: a mutual cap at fees paid or payable, excluding indirect and consequential damages for both sides.
Why this clause bites
Your liability for everything under the sun is unlimited while the contract is silent about theirs. In an extreme case a $2,000 logo project could expose you to a six-figure claim.
The wording to look for
Illustrative wording — if your contract says anything close to this, the trap is live. The dangerous phrases are highlighted:
In no event shall Client be liable for any indirect, incidental, or consequential damages. Contractor shall be liable for all damages arising out of this Agreement, without limitation.
Highlighted phrases are the ones that create the risk — trade them out with the fix below.
Add a mutual cap: "Each party's total liability is limited to fees paid or payable under this contract. Neither party is liable for indirect or consequential damages."
Written to be forwarded to the client directly — polite, professional, and sourced (see below).
Questions freelancers ask
What's a normal liability cap for freelance projects?
The most common mutual formulation caps each side's total liability at the fees paid (or payable) under the contract, and excludes indirect and consequential damages for both parties.
Why does a cap protect you more than it sounds?
Without a cap, a claim that far exceeds the project value is still your exposure. A cap tied to the fees keeps risk proportional to the engagement — the standard commercial trade-off.
Source reference: Nolo — Limitation of liability; bar association contract drafting guides
Every finding in a ContractShield report cites the same public resource this guide is based on — verify it yourself before you act on it.
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Educational content only — not legal advice, and it creates no attorney–client relationship. For anything material to you, consult a licensed attorney in your state.