4
PLAYBOOK TEMPLATES

Mutual Confidentiality (Non-Disclosure Agreement)

A Mutual NDA establishes reciprocal obligations to protect proprietary and confidential information. This playbook addresses definition scope, duration, and permitted disclosure exceptions.

Liability Limitations

Why This Matters: Limiting liability is crucial to avoid disproportionate financial exposure and to protect overall deal economics.

Negotiation strategy

If you're the Disclosing Party A:

Negotiate for a liability cap that aligns with the company's risk tolerance. Ensure carve-outs for indemnity items and include exceptions for fraud and willful misconduct.

If you're the Disclosing Party B:

Aim to limit liability to a reasonable amount while ensuring that exceptions for fraud and willful misconduct are clearly defined.

Essential elements

1

Liability Cap

Maximum financial exposure limit.
2

Exclusions

Items not covered by liability cap.
3

Liquidated Damages

Pre-agreed compensation for breaches.

Action framework

ACCEPT

Propose edits if liability cap is too high or lacks necessary exceptions.

EDIT

Reject if clause imposes unlimited liability.

ADD

Add clause if missing to ensure liability is capped.

PRO TIP

Always ensure exceptions for fraud and willful misconduct are included to protect against unfair risk allocation.

Example clauses

FAVORABLE

Reasonable Liability Cap

"The liability of [Party] shall be limited to [amount], except in cases of fraud, willful misconduct, or gross negligence."
NEUTRAL

Standard Liability Clause

"The liability of [Party] shall be limited to [amount], with exceptions for fraud and willful misconduct."
UNFAVORABLE

Unlimited Liability

"The liability of [Party] shall be unlimited."

Fallbacks

High-Risk Transactions

High-risk transactions may require tailored liability limitations to address specific risks, consulting with risk management and legal teams.

International Deals

International deals may necessitate adjustments to liability caps due to varying legal standards across jurisdictions.

Technology Contracts

Technology contracts often require specific carve-outs for intellectual property and data breaches.
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