If something goes seriously wrong with AI21's service and you want to hold the company financially responsible, the most you can recover is either $100 or whatever you paid AI21 in the prior year, whichever is larger.
This analysis describes what AI21 Labs's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
For developers or businesses that rely on AI21's API for production systems, a liability cap of $100 or twelve months of fees may be far below the actual cost of a service failure, data incident, or harmful output.
The updated terms remove the explicit "Your Opt-Out Rights" button that previously allowed users to opt out of data sales and targeted advertising. In its place, the revised language establishes a general cookie consent framework requiring users to click "Accept" to allow cookies for site navigation, usage analysis, and marketing efforts. Users retain the ability to choose not to allow certain cookie types, but the prior dedicated opt-out mechanism for data sales and targeted advertising is no longer explicitly described in the accessible terms interface. If you wish to control cookie preferences, you can click on the cookie settings to modify consent for different types of cookies; however, strictly necessary cookies cannot be declined as they are required for core website functionality.
View change record →Changed from 'CUMULATIVE' to 'AGGREGATE' liability terminology, removed 'WHETHER IN CONTRACT, TORT, OR OTHERWISE' language, simplified currency notation from 'ONE HUNDRED U.S. DOLLARS ($100)' to '$100 USD', and reordered the greater-of comparison clauses.
View full change record →If AI21's service causes financial harm, exposes sensitive data, or produces outputs that result in damage, the agreement limits any legal recovery to $100 or the prior year's payments. For most consumer-tier users this may be nominal; for enterprise customers, this cap may not reflect actual commercial exposure.
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Google's total liability to you for any claims under these terms, including for any implied warranties, is limited to the amount you paid us to use the Gemini API (or, if we choose, to supplying you the services again) in the 12 months before the breach.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, DUOLINGO SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR ANY LOSS OF PROFITS OR REVENUES, WHETHER INCURRED DIRECTLY OR INDIRECTLY, OR ANY LOSS OF DATA, USE, GOODWILL, OR OTHER INTANGIBLE LOSSES, RESUL...
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"TO THE MAXIMUM EXTENT PERMITTED BY LAW, AI21'S TOTAL AGGREGATE LIABILITY TO YOU FOR ANY CLAIMS ARISING OUT OF OR RELATED TO THESE TERMS OR THE SERVICES SHALL NOT EXCEED THE GREATER OF (A) $100 USD OR (B) THE AMOUNTS PAID BY YOU TO AI21 IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM.— Excerpt from AI21 Labs's AI21 Labs Terms of Use
(1) REGULATORY LANDSCAPE: Liability caps in consumer contracts may be subject to challenge under consumer protection laws in the EU (Unfair Contract Terms Directive) and in certain US states where courts have found such caps unconscionable in the context of gross negligence or statutory violations. GDPR does not restrict contractual liability caps between businesses, but data subjects retain independent rights to compensation under GDPR Article 82 regardless of contractual arrangements between controllers and processors. The FTC Act may be relevant if the cap is applied in a manner that is deceptive or unfair to consumers. (2) GOVERNANCE EXPOSURE: High for enterprise customers. A $100 floor is effectively nominal for any commercial relationship. Twelve months of API fees may also be insufficient to cover the cost of a data breach, regulatory fine, or service-dependent business interruption. This cap is common in the software-as-a-service industry but warrants specific risk assessment for mission-critical deployments. (3) JURISDICTION FLAGS: EU consumers may have non-waivable statutory rights that limit the enforceability of this cap in claims involving personal data or consumer harm. The UK Consumer Rights Act and EU Unfair Contract Terms Directive may limit enforceability of this provision against individual consumers. California consumers should also assess whether state unconscionability doctrine applies. (4) CONTRACT AND VENDOR IMPLICATIONS: Enterprise procurement teams should treat this cap as a negotiation point for any agreement where AI21 processes sensitive data or where the customer's business depends on service availability. Standard commercial practice for enterprise SaaS agreements often includes higher caps tied to a multiple of annual contract value or specific carve-outs for data breach liability. This provision as written shifts substantial financial risk to the customer. (5) COMPLIANCE CONSIDERATIONS: Legal teams should assess whether reliance on AI21 services for regulated or high-stakes use cases is consistent with this liability posture, and consider whether contractual indemnification or cyber insurance coverage is needed to bridge the gap. If AI21 is treated as a data processor under GDPR, Article 82 liability toward data subjects cannot be contractually eliminated, even if the B2B liability cap applies between the parties.
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For developers or businesses that rely on AI21's API for production systems, a liability cap of $100 or twelve months of fees may be far below the actual cost of a service failure, data incident, or harmful output.
If AI21's service causes financial harm, exposes sensitive data, or produces outputs that result in damage, the agreement limits any legal recovery to $100 or the prior year's payments. For most consumer-tier users this may be nominal; for enterprise customers, this cap may not reflect actual commercial exposure.
ConductAtlas has identified this type of provision across 4 platforms. See the full comparison.
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