Aside from disclaiming warranties, how can a seller limit exposure to contract liability?

The UCC, with limited exceptions, allows contracting parties to allocate and divide risk between them as they see fit. Pursuant to this authority, a seller should limit its potential contractual liability by doing the following:

  1. Disclaiming incidental and consequential damages;
  2. Limiting the contractual remedy for nonconforming goods to repairing or replacing the goods, with it being at the seller’s discretion as to whether to repair or replace;
  3. Include a reasonable liquidated damages cap or formula; and
  4. Set the statute of limitations for contract claims under the agreement at one year—shortening it from the default four-year statute of limitations.


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