Liability Cap
A liability cap (vastuunrajoitus) limits the maximum amount of damages a supplier may be required to pay under a public procurement contract. Liability caps are a standard feature of Finnish public procurement contracts and are typically defined in the JYSE general terms or contract-specific conditions.
Definition
A liability cap is a contractual provision that limits a party's total liability for damages arising from the contract. In Finnish public procurement, liability caps are typically set as a percentage of the contract value or as a fixed monetary amount. Under JYSE 2014 terms, the supplier's total liability for damages is generally limited to direct damages, and indirect or consequential damages are excluded unless caused by intentional misconduct or gross negligence. The specific cap amount is defined in the contract-specific terms, as JYSE itself does not set a fixed monetary limit.
Practical Example
A contract for software development worth EUR 500,000 includes a liability cap of 100% of the annual contract value. If the supplier causes direct damages exceeding EUR 500,000, the supplier's liability is capped at that amount. However, damages caused by intentional misconduct are not subject to the cap.
Common Mistake
Suppliers sometimes assume the liability cap protects them in all circumstances. Caps typically do not apply to damages arising from intentional misconduct, gross negligence, breaches of confidentiality obligations, or intellectual property infringement.
Frequently Asked Questions
What is a typical liability cap in Finnish public procurement?
Liability caps typically range from 50% to 100% of the annual or total contract value, depending on the nature and risk profile of the procurement. High-risk IT projects may have higher caps, while routine supply contracts may have lower ones.
Does the liability cap cover delay penalties?
This depends on the specific contract terms. In some contracts, delay penalties are calculated separately and have their own cap (often 10-20% of the contract value), while in others they count toward the overall liability cap.
Related Terms
Framework Agreement
Understand framework agreements in Finnish public procurement. How multi-year agreements with one or more suppliers work under hankintalaki 1397/2016.
JYSE General Terms
Understand JYSE general contract terms used in Finnish public procurement. Standard terms for goods (JYSE Tavarat) and services (JYSE Palvelut).
Delay Penalty
Understand delay penalties in Finnish public procurement contracts. How viivästyssakko works, typical rates, and how to manage delivery risks.
Contract Period
Learn about contract periods in Finnish public procurement. How sopimuskausi duration, options, and extensions work under procurement law.
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