Is Your Limitation of Liability Clause Enforceable in Florida?

The Short Answer: Enforceable, but Not Automatically

But enforcement isn’t automatic. A court looks at how the deal was made, what the clause says, and whether it holds up under Florida law.

This page covers the main limits in the order they usually come up. For broader context, see our Florida contract disputes guide for Tampa-area businesses.

What a Limitation of Liability Clause Does

A limitation of liability clause caps or cuts off what one party can recover if the contract is broken or the work goes wrong. Three forms are common:

• A dollar cap. The clause sets a maximum amount, often tied to the contract price.
• A damages exclusion. The clause removes consequential or indirect damages, such as lost profits that follow from a breach.
• A waiver. The clause gives up certain kinds of claims.

Businesses use these clauses to set risk before work starts. A contractor may want a cap that matches the job price. A supplier may want lost profits kept out of the deal. The buyer should know exactly what the cap covers.

The idea appears in service contracts and in sales of goods. Chapter 672 of the Florida Statutes covers transactions in goods, as the goods scope rule in § 672.102 explains. In a mixed deal, the goods side and the service side can follow different rules. A services contract does not simply follow the goods rules.

How Florida Courts Look at Clauses Between Businesses

Courts look at how the deal was made and how one-sided the terms are. The Florida Supreme Court held in Basulto v. Hialeah Automotive that a court needs both parts of unconscionability (unfair terms). Procedural unconscionability looks at how the deal was made. Substantive unconscionability looks at how unfair the terms are. In Basulto v. Hialeah Automotive, the Florida Supreme Court concluded that both the procedural and substantive aspects of unconscionability must be present, although not necessarily to the same degree, and that both should be evaluated interdependently rather than as independent elements.

If a court finds a clause unconscionable, it has options. It may refuse to enforce the whole contract. It may enforce the rest and drop the bad clause. It may limit the clause so it avoids an unfair result. When this comes up, both sides get a fair chance to show the deal’s commercial setting, purpose and effect.

Terms added later can also matter. Between merchants, a cap on an invoice or confirmation can become part of the deal unless the offer limited acceptance to its own terms, the cap materially changes the deal, or the other side objected in time. See § 672.207.

Limits to Check: Unfair Terms, Fraud, and Tort Claims

Fraud is one area where a cap may not do what the drafter wanted. A promise of future action can also matter in a fraud claim: under Frutafino, S.A.S. v. Dole Chile, S.A., such a promise may constitute a fraudulent misrepresentation when the plaintiff can demonstrate that the person making it had no intention of performing or a positive intention not to perform. The court in Frutafino, S.A.S. v. Dole Chile, S.A. explained that if the plaintiff can demonstrate that the person promising future action does so with no intention of performing or with a positive intention not to perform, such a promise may also constitute a fraudulent misrepresentation. A party who signs with no plan to deliver can face that claim.

The same opinion says a party generally cannot recover in tort for a contract dispute unless the tort is independent of the breach. Calling a broken contract a tort may not work. Claims based on a contract that covers the same subject can also fail. In Williams v. Johnson, a Florida appeals court said an express contract covering the same subject does not support an unjust enrichment claim.

Read the cap with these rules in mind. The clause alone rarely answers the question. The facts of how the deal was made and performed often decide it.

Drafting and Wording Issues That Affect Enforceability

Start with the words. Check whether the clause names the type of claim it covers, such as breach of contract, negligence, or warranty claims. Vague language invites a fight over what it means.

If the deal involves goods, warranty language has set rules. To exclude the implied warranty of merchantability, the language must mention merchantability. In a writing, it must also be conspicuous, meaning it stands out. See § 672.316(2). Phrases like “as is” can exclude implied warranties unless the circumstances indicate otherwise, under § 672.316(3)(a).

Watch for clauses that shorten the time to sue. Under § 95.03, a contract provision that sets a period shorter than the statute of limitations is void.

Notice terms also matter. For goods already accepted, § 672.607(3)(a) requires the buyer to notify the seller of a breach within a reasonable time after discovering or should have discovering any breach, or be barred from any remedy.

Where a suit can be filed is a separate question. § 47.011 says actions must be brought only in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located, and this section does not apply to actions against nonresidents. Read any forum clause alongside the cap. Our page on forum selection clauses covers that issue.

Finally, check the cap amount and any carve-outs for indemnity, confidentiality or third-party claims. Each one changes how much the cap actually protects.

Related Contract Terms That Change the Picture

A cap in one contract does not change other agreements. A personal promise by an owner to pay the company’s debt is a separate agreement. Read it on its own terms next to the cap. Our page on owner liability for LLC contract debt explains how these claims are handled.

Damages in a breach case can also raise interest questions. See our page on prejudgment interest in breach of contract damages for how those questions come up.

When to Have the Clause Reviewed by a Litigator

Get the clause reviewed when a dispute has started. Review it before signing a large project or deal. Review it when a cap looks like it excludes the main risk. Review it when the other side’s conduct may fall outside the clause.

Enforceability depends on the exact wording, the facts of the dispute, and the rules that apply. A general reading can miss those details.

Ayala Law PA focuses on business litigation. That includes commercial and contract disputes, shareholder and partnership disputes, construction litigation, real estate litigation, and international trade disputes. The firm’s only office is in Tampa, at 1646 W Snow Ave, and it represents businesses in Tampa and Hillsborough County. Its Tampa Bay practice serves businesses in Tampa, Hillsborough County, Brandon, Riverview, Plant City and Temple Terrace. Eduardo A. Maura is the lawyer responsible for this page.

Quick Answers

If your company signed a contract with a cap that seems to block recovery for a loss it has already taken, call Ayala Law PA at (305) 570-2208 or send a message through our contact page. We can talk through that clause with you.