If AT&T causes you harm, the most you can recover is what you paid AT&T over the past year. You cannot recover additional damages for things like lost business, emotional distress, or other consequential harms.
This analysis describes what AT&T'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
If a service outage causes you to lose business income or if a privacy breach causes significant harm, AT&T's maximum financial exposure to you is capped at your prior year's bills, which may be far less than your actual loss.
Interpretive note: Enforceability of the consequential damage waiver in consumer contexts varies by state; some states provide statutory remedies for data breaches and unfair business practices that may not be waivable by contract.
This clause caps AT&T's financial responsibility for any harm it causes you at your prior 12 months of payments, and excludes all consequential damages, meaning significant losses caused by service failures or data breaches would not be compensable under the contract.
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"TO THE MAXIMUM EXTENT PERMITTED BY LAW, AT&T'S LIABILITY FOR ANY CLAIMS ARISING UNDER OR RELATED TO THIS AGREEMENT OR THE SERVICE SHALL BE LIMITED TO THE AMOUNTS PAID BY YOU TO AT&T FOR THE SERVICE DURING THE TWELVE (12) MONTHS IMMEDIATELY PRIOR TO THE CLAIM. IN NO EVENT SHALL AT&T BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES.— Excerpt from AT&T's AT&T Terms of Service
REGULATORY LANDSCAPE: Limitation of liability clauses in consumer telecommunications contracts interact with state consumer protection statutes that may prohibit waiver of statutory remedies, FCC service quality regulations, and in the data breach context, state breach notification laws that may provide independent statutory damages. Some state consumer protection statutes, including California's Consumer Legal Remedies Act, may constrain the enforceability of consequential damage waivers in consumer contracts. GOVERNANCE EXPOSURE: Medium. While limitation of liability caps are standard in commercial telecommunications contracts, the breadth of the consequential damage exclusion in a consumer context, particularly covering privacy and data breach scenarios, may face challenge under state consumer protection or data breach liability statutes that create independent non-waivable rights to damages. JURISDICTION FLAGS: California, Illinois, and New York have state statutes that may provide independent bases for damages that cannot be waived by contract terms, including for data breaches and unfair business practices. Business customers in states with commercial code protections may have different enforceability outcomes for consequential damage waivers in B2B contexts versus consumer agreements. EU and UK users would have statutory consumer rights that cannot be limited by contract terms. CONTRACT AND VENDOR IMPLICATIONS: Enterprise customers should negotiate contractual liability limits above the 12-month payment cap and seek specific carve-outs for data breach, gross negligence, and willful misconduct. The exclusion of punitive and exemplary damages may affect the deterrence value of arbitration as a dispute resolution mechanism for business customers. SLA financial remedies in enterprise agreements may need to be structured to operate within or alongside this limitation. COMPLIANCE CONSIDERATIONS: Business customers relying on AT&T for critical services should ensure that their own customer-facing contracts do not create liability exposure that exceeds what can be recovered from AT&T under this cap. Assess whether cyber liability insurance covers gaps left by AT&T's consequential damage exclusion in a data breach scenario. Review whether applicable state data breach statutes provide non-waivable statutory damages that would supplement the contractual cap.
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If a service outage causes you to lose business income or if a privacy breach causes significant harm, AT&T's maximum financial exposure to you is capped at your prior year's bills, which may be far less than your actual loss.
This clause caps AT&T's financial responsibility for any harm it causes you at your prior 12 months of payments, and excludes all consequential damages, meaning significant losses caused by service failures or data breaches would not be compensable under the contract.
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