Risk & events 1.15

FIDIC reference

Sub-Clause 1.15 — Limitation of Liability

Neither party is liable for indirect losses (loss of profit, loss of contract, etc.), and total liability is capped at the amount stated in the Contract Data.

Applies in: Red BookYellow BookSilver Book

The clause excludes each party’s liability to the other for loss of use, loss of profit, loss of any contract and any indirect or consequential loss, except in expressly stated cases (for example, delay damages or indemnities). The Contractor’s total liability to the Employer under the contract is capped at the sum stated in the Contract Data, or, if none is stated, the Accepted Contract Amount. The cap does not apply in cases of fraud, gross negligence or deliberate default.

Key points

  • Indirect losses excluded: loss of profit, loss of use, loss of contract.
  • The overall liability cap comes from the Contract Data.
  • If no cap is stated, the Accepted Contract Amount applies.
  • No protection for fraud, gross negligence or deliberate default.

How this works in practice

Limitation of liability is a short clause that sets the ceiling on the commercial risk of the whole project. It must be read together with its carve-outs: the cap typically does not reach certain categories — fraud, deliberate default, Clause 17 indemnities, sometimes delay damages. The pre-signature check comes down to three figures: what the overall cap is, what sits outside it, and how it relates to the delay damages cap. Where the overall cap equals the Contract Price and the carve-out list is long, the protection is largely nominal.

Common traps

  • The carve-out list is widened in the Particular Conditions to the point where the cap loses practical meaning.
  • The exclusion of indirect loss is deleted, leaving the Contractor answerable for the Employer’s loss of profit.
  • The cap is denominated in a currency other than the payment currency with no conversion mechanism.

Versions: 1999 → 2017 → 2022

  1. 1999

    Located at Sub-Clause 17.6 (Limitation of Liability) within the risk clause.

  2. 2017

    Moved to the general provisions — Sub-Clause 1.15, with an explicit list of exclusions and the cap.

  3. 2022

    The 2022 reprint clarified the exclusion wording without changing substance.

Clause FAQ

Which FIDIC books use Sub-Clause 1.15?

The clause applies in Red Book, Yellow Book, Silver Book. Particular Conditions may change the standard risk allocation, so always check the project contract.

What size of overall cap is considered market standard?

There is no universal figure: it depends on project type, risk allocation and lender requirements. What matters practically is not the absolute number but how the cap relates to the project’s real exposure and to the carve-outs. A cap set at the Contract Price with a broad exclusion list can protect less than a lower cap with a narrow one.

Does a limitation of liability hold up under Uzbek law?

A contractual cap operates only within the limits the governing law allows. Civil law systems, Uzbekistan included, contain mandatory rules a cap cannot override — notably those on intentional wrongdoing and injury to life and health. The wording therefore needs a legal opinion under the governing law rather than a straight lift from an English-language template.

Related clauses

8.8 Sub-Clause 8.8 — Delay Damages 19 Clause 19 — Insurance 17 Clause 17 — Care of the Works and Indemnities

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Reference material, not legal advice. Always check your contract and the Particular Conditions.