Which concept limits the amount recoverable by liability restrictions?

Which concept limits the amount recoverable by liability restrictions?

• A. Duty of Care
• B. Limitation of Liability
• C. Privity of Contract
• D. Standard of Care

Answer: (B)

Limitation of liability sets a cap on how much can be recovered under a contract, making it the mechanism that constrains damages. In many design-build or construction agreements, this clause caps the damages available for certain breaches or excludes specific types of damages, so the recoverable amount cannot exceed the agreed limit. This is why it directly answers the question about limiting the amount recoverable. The other concepts describe obligations or relationships rather than caps on damages. Duty of care refers to a general obligation to act with reasonable care to avoid harm. Standard of care specifies the level of performance expected. Privity of contract concerns who has rights under the contract to sue or be sued. While these matter, they do not themselves set a monetary limit on recoverable damages.

Limitation of liability sets a cap on how much can be recovered under a contract, making it the mechanism that constrains damages. In many design-build or construction agreements, this clause caps the damages available for certain breaches or excludes specific types of damages, so the recoverable amount cannot exceed the agreed limit. This is why it directly answers the question about limiting the amount recoverable.

The other concepts describe obligations or relationships rather than caps on damages. Duty of care refers to a general obligation to act with reasonable care to avoid harm. Standard of care specifies the level of performance expected. Privity of contract concerns who has rights under the contract to sue or be sued. While these matter, they do not themselves set a monetary limit on recoverable damages.