What is the liability of Ouhud GmbH?

What Cannot Be Waived

The law sets three limits, regardless of what is stated in a contract:

• Intent. Liability for intent cannot be waived in advance by the debtor (§ 276 Abs. 3 BGB).
• Life, body, health, and gross negligence. An exclusion or limitation in general terms and conditions is ineffective (§ 309 Nr. 7 BGB). This provision does not apply directly to businesses (§ 310 Abs. 1 BGB); however, courts regularly refer to it as a benchmark through § 307 BGB.
• Essential contractual obligations. Limiting liability for obligations whose fulfillment makes the purpose of the contract possible is considered unreasonable (§ 307 Abs. 2 Nr. 2 BGB).

Therefore, almost all IT contracts have the same structure: unlimited liability for intent and gross negligence, limited liability for slight negligence, and even then only for essential obligations, restricted to the typically foreseeable damage under the contract.

Three Numbers That Must Be Read Together

The third line is the reason why the second is important. A minimum share capital of 25,000 Euros is not a cushion for a major loss. For small providers, the question of proof of insurance is therefore more substantial than the question of the contract clause.

Common Exclusions from Liability

In software contracts, three exclusions are common – you should know them before signing:

• Lost profits and indirect damages. Almost always excluded or capped separately.
• Data loss. Often limited to the effort that would have been necessary for recovery with proper data backup. This is objectively justifiable – but assumes that data backup has been agreed upon and tested.
• Third-party systems provided by the client. Anyone building an interface to a system they do not operate cannot be held liable for its failures.

Duration of Claims

Claims for defects from a work contract expire according to § 634a BGB either two years from acceptance (Abs. 1 Nr. 1, for works on a thing) or in the regular period of three years (Abs. 1 Nr. 3, § 195 BGB). Which variant applies to custom software is not conclusively clarified – therefore, the statute of limitations should be explicitly included in the contract. If the contractor has fraudulently concealed a defect, the regular period applies anyway (§ 634a Abs. 3 BGB).

What You Should Demand Before Signing the Contract

1. A current insurance confirmation with coverage amount, duration, and indication of whether it is a maximum per year.
2. Information on whether projects outside Germany – for example, in Switzerland – are covered by the insurance.
3. A regulation on who is liable for subcontractors.
4. Clarity on whether the limit applies per claim or per contract year. This is a bigger difference than the number itself.

Where This Regulation Reaches Its Limits

A liability limit equal to the contract value is standard in the industry. However, it does not cover consequential damages if a business-critical system is down for a week. If your risk is significantly greater than the project budget, the right answer is not a higher clause with a small service provider – that would only be higher on paper. The right answer is a separate business interruption or cyber insurance plus an emergency procedure that allows you to maintain operations without the system for several days.