Cap on Liability

A cap-on-liability clause (sometimes labelled "limitation of liability") sets the maximum aggregate amount one party can be required to pay the other under the contract. The cap is typically expressed as a multiple of fees paid (often 1x or 2x), a flat dollar figure, or "fees paid in the preceding 12 months." Most caps exclude certain categories of liability — indemnification for third-party claims, breach of confidentiality, IP infringement, gross negligence, and willful misconduct — because parties refuse to cap exposure for serious wrongdoing. Athletes should always have a liability cap aligned to compensation actually received under the deal; otherwise a $5,000 NIL post can theoretically trigger millions in damages. Equally, athletes should resist asymmetric caps that limit brand liability while leaving athlete liability uncapped.