The situation
A supplier contract, uploaded
A Leipzig e-commerce company is renewing two contracts: warehouse software from a supplier in Manchester under English law, and parcel-sorting hardware from a supplier in Stuttgart under German law. Procurement has passed both to finance, who own the budget and the risk. The CFO wants to know what happens if either supplier fails.
The contracts run to 40 and 65 pages. Each caps liability at twelve months’ fees, excludes lost profits and sets its own exit route. The questions are fair: does the cap hold, what does it leave out, and how do we get out? Legal is booked for three weeks.
What the research has to settle
The rules behind the answer
- Read the cap with its exclusions
- A cap is usually paired with exclusions of indirect loss or lost profits, and with carve-outs that sit outside the cap. Read the three together: the carve-outs decide what the cap actually limits.
- English law tests reasonableness
- Under the Unfair Contract Terms Act 1977, a business clause limiting liability for negligence, or for breach on one party’s written standard terms, must meet a reasonableness test. Liability for death or personal injury caused by negligence cannot be excluded.
- German standard terms are reviewed between businesses too
- Under the BGB rules on standard terms, a clause cannot exclude liability for intent or gross negligence, or for injury to life, body or health. The courts also hold caps on breach of essential contractual duties to the foreseeable, typical damage. Individually negotiated clauses are treated differently.
- Exit is in the contract and the law
- Check the term, renewal and notice clauses first. German law also allows long-term contracts to be ended for good cause, and English law allows termination for repudiatory breach, but neither replaces a clear termination clause.
How it runs in azta
From the question to the document
The question, as you would type it
Attached is our warehouse software agreement under English law. Liability is capped at fees paid in the previous 12 months and loss of data is excluded entirely. Does the exclusion cover data loss caused by the supplier’s negligence, and is it likely to pass the reasonableness test under UCTA?
You start with
A supplier contract, uploaded
- 01
Upload the contracts
Add both contracts and their schedules. azta reads them and refers back to the clause behind each answer.
File upload· Pro - 02
Ask the finance questions
Ask what the cap covers, what sits outside it and how each contract can end. azta cites the Unfair Contract Terms Act and the BGB.
Cited research· Free - 03
Check how German courts read caps
For the German contract, ask for decisions on liability caps in standard terms. azta summarises the holdings with links to the full text.
Case-law search - 04
Write the Q&A for the CFO
Ask for a short note per contract: cap, carve-outs, exit, and the points to raise with legal. Edit it in Canvas.
Canvas · Ask azta· Pro You send
Answers on the liability cap, the exclusions and the exit terms, with the law behind each
What you get
Answers on the liability cap, the exclusions and the exit terms, with the law behind each
Contract Q&A · draft
Warehouse software agreement: liability and exit
Cap. Clause 14 limits the supplier’s total liability to the fees paid in the twelve months before the claim. Clause 14.4 excludes loss of data entirely, including loss caused by the supplier’s negligence. If the agreement is on the supplier’s standard terms, that exclusion is the clause most exposed to the reasonableness test.
Carve-outs. Fraud, and death or personal injury caused by negligence, sit outside the cap, as the law requires. Breach of the confidentiality clause is not carved out, so a claim for it is capped like any other.
Exit. The agreement runs for three years and renews for one-year terms unless notice is given six months before expiry. There is no termination for convenience. Before the renewal window closes, consider asking for a shorter notice period and a data-return clause.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
18 minutes a month
At €90 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 29
- Capacity at your rate
- €2,592
- More contract questions from finance a quarter
- 2.9
- Return on Pro
- 8×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoSources azta searches here
- legislation.gov.uk
- Gesetze im Internet
- Rechtsprechung im Internet
What stays with you
- The commercial negotiation with the supplier.
- Escalating to legal counsel where the answer drives the decision.
- The decision to sign.
Frequently asked questions
- Is this legal advice?
- No. azta researches and cites the law and points to the clauses it relied on. Your legal counsel decides what to rely on.
- Does azta hold English court decisions?
- Coverage of court decisions varies by country, and the source register lists each collection. For the English contract, check the register before relying on azta for case law.
- Can I compare two contracts?
- Yes. Upload both and ask for a side-by-side table of caps, carve-outs and exit terms, each with the clause reference.
