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PLAYBOOK TEMPLATES
Manufacturing Services Agreement
A Manufacturing Services Agreement establishes how a manufacturer will produce goods on behalf of another party, often covering quality, delivery, and intellectual property. This playbook highlights negotiation tactics for pricing, warranty coverage, and supply chain continuity.
Limitation of Liability
Negotiation strategy
Negotiate a liability cap that aligns with your risk tolerance and insurance coverage. Ensure exclusions for gross negligence and willful misconduct are clearly defined.
Aim for a liability cap that reflects the scope of work and potential risks. Advocate for reasonable carve-outs to protect against excessive liability.
Essential elements
1
Liability Cap
Maximum financial exposure limit.
2
Exclusions
Exceptions to liability limits.
3
Carve-Outs
Specific liability exceptions.
Action framework
ACCEPT
Propose edits when liability caps are unclear or misaligned with risk profiles.
EDIT
Reject clauses that expose parties to unlimited liability or lack necessary exclusions.
ADD
Add language to specify liability caps and necessary exclusions.
PRO TIP
Always align liability caps with your insurance coverage to avoid uncovered risks.
Real-world examples
FAVORABLE
Preferred Limitation of Liability
"The liability of each party under this agreement shall not exceed [specific amount or percentage]. This limitation shall not apply to liabilities arising from gross negligence or willful misconduct."
NEUTRAL
Standard Limitation of Liability
"In no event shall either party's liability exceed [specific amount or percentage], except as required by applicable law."
UNFAVORABLE
Unlimited Liability Exposure
"Each party shall be liable for all damages without limitation."
Alternative scenarios & positions
High-Risk Transactions
In high-risk industries, consider additional carve-outs or increased caps due to heightened risk.
Low-Risk Services
For low-risk services, a lower liability cap may be sufficient, reducing insurance costs.
International Agreements
Consider jurisdictional differences in liability laws when setting caps in international contracts.
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WEEK 3
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WEEK 4
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