If something goes seriously wrong, neither side can recover more than what was paid in the last 12 months, and neither side can sue for lost profits, lost data value, or other indirect losses.
This analysis describes what Egnyte'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 businesses storing high-value or irreplaceable data on Egnyte, the cap on liability may be far lower than the actual cost of a data loss or prolonged outage event.
If Egnyte experiences a breach or outage that damages your business, the maximum you can recover is limited to 12 months of subscription fees, regardless of the actual financial harm caused.
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You will remain responsible for any amounts you fail to pay in connection with your subscription, including collection costs, bank overdraft fees, collection agency fees, reasonable attorneys' fees, and arbitration or court costs.
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"IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL AMOUNT PAID BY CUSTOMER IN THE TWELVE (12) MONTHS PRECEDING THE INCIDENT GIVING RISE TO THE LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR EXEMPLARY DAMAGES.— Excerpt from Egnyte's Egnyte Terms of Service
(1) REGULATORY LANDSCAPE: Limitation of liability clauses are standard in commercial SaaS agreements and are generally enforceable in most U.S. jurisdictions. However, some states impose restrictions on liability waivers in certain contexts, and the clause's enforceability may be limited where gross negligence or willful misconduct is involved. For EU customers, certain consumer protection and data protection liability frameworks may limit the enforceability of such caps where GDPR violations result in harm. (2) GOVERNANCE EXPOSURE: High. For enterprise customers storing mission-critical or high-value content, a 12-month fee cap may represent a fraction of the actual risk exposure. This is particularly relevant for organizations in regulated industries where a data breach could trigger regulatory fines, third-party liability, or significant remediation costs that exceed the cap. (3) JURISDICTION FLAGS: California courts have at times scrutinized liability limitations that appear unconscionable. EU customers should note that GDPR Article 82 establishes data subject rights to compensation that may not be waivable by contract between controller and processor. In the UK, the Unfair Contract Terms Act may subject similar clauses to a reasonableness test. (4) CONTRACT AND VENDOR IMPLICATIONS: Procurement teams negotiating enterprise agreements should consider whether the liability cap is negotiable and whether Egnyte offers enhanced SLAs or indemnification for specific incident types such as data breaches caused by Egnyte's negligence. The mutual nature of the cap (applying to both parties) is standard but should be noted. (5) COMPLIANCE CONSIDERATIONS: Organizations should assess their own cyber insurance coverage and whether it addresses gaps created by the liability cap. Risk assessments should account for the disparity between the cap amount and potential breach-related costs, particularly for organizations in HIPAA, CMMC, or GDPR-regulated contexts.
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For businesses storing high-value or irreplaceable data on Egnyte, the cap on liability may be far lower than the actual cost of a data loss or prolonged outage event.
If Egnyte experiences a breach or outage that damages your business, the maximum you can recover is limited to 12 months of subscription fees, regardless of the actual financial harm caused.
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