Exculpatory clause
An exculpatory clause is a provision of a contract that aims to limit or eliminate one party's liability for certain breaches, acts, or omissions. It is designed to protect one party from being held legally responsible for specific risks or damages that may arise during the execution of the contract. These clauses can limit the amount or type of damages that one party can recover from the other. For example, a contractor might limit their liability for delays to a certain monetary cap. Some clauses may exclude liability altogether for certain types of damages, such as consequential or indirect losses.
Exculpatory clauses often address specific risks inherent to construction projects, such as unforeseen site conditions, acts of nature, or third-party actions. They might establish a lower standard of care for which the contractor is responsible, thereby reducing the potential for liability. For example, liability might be limited to cases of gross negligence rather than ordinary negligence.
While often benefiting the contractor or service provider, exculpatory clauses can be mutual, providing protections to both parties in the contract.
Common examples include:
- Clauses that excuse performance due to extraordinary events beyond the control of the parties, such as natural disasters, war, or strikes.
- Provisions that cap the amount of damages one party can claim, such as limiting compensation for project delays to a specific sum per day.
- Excluding liability for indirect or consequential losses, such as lost profits or business interruptions.
- Requiring one party to indemnify the other for specific risks, thus transferring the risk from one party to another.
- Explicit waivers of specific types of claims, such as waiving the right to claim for minor defects after completion.
- Limiting liability for design errors to the amount of the designer's professional indemnity insurance.
- Excluding liability for defects in materials provided by the client or specified by the client.
Exculpatory clauses are a common feature in construction contracts to manage and allocate risk. However, their enforceability depends on how they are drafted and whether they comply with relevant legal standards and principles.
Under the Unfair Contract Terms Act 1977 (UCTA), exculpatory clauses must be reasonable to be enforceable. Courts will assess reasonableness based on factors such as bargaining power, the nature of the contract, and the clarity of the clause.
Clauses must be clearly drafted and communicated to all parties. Ambiguities are often construed against the party seeking to rely on the clause (contra proferentem rule). Clauses that attempt to exclude liability for death or personal injury resulting from negligence are generally unenforceable under UK law.
[edit] Related articles on Designing Buildings
Featured articles and news
Boiler Upgrade Scheme and certifications consultation
Summary of government consultation which closes 11 June 2025.
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
From project managers to rising stars, sustainability pioneers and more.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.
Construction Products Reform Green Paper and Consultation
Still time to respond as consultation closes on 21 May 2025.
Resilient façade systems for smog reduction in Shanghai
A technical approach using computer simulation and analysis of solar radiation, wind patterns, and ventilation.