If Gusto makes an error that costs you money, the maximum amount you can recover from Gusto is limited to the fees you paid Gusto over the past twelve months, regardless of how large your actual loss is.
This analysis describes what Gusto'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 that process large payrolls, the actual financial harm from a payroll processing failure could far exceed twelve months of Gusto subscription fees, leaving the employer-customer absorbing most of the loss.
The updated terms make explicit that requesting a background check through Gusto creates a legally binding agreement not just with Gusto but also incorporating terms from Gusto's payroll service and Checkr's service agreement. This means customers are committing to multiple overlapping sets of terms when they initiate a background check request. The change does not appear to alter the substantive rights or obligations, but rather clarifies their scope and binding nature in writing.
View change record →Developers integrating with Gusto's platform are now bound by mandatory arbitration and class action waiver provisions, meaning they cannot join or file class actions against Gusto and must resolve disputes through individual, binding arbitration. The updated terms also grant Gusto the right to modify, update, or discontinue developer tools at its sole discretion without notice or liability, which could disrupt integrations and require developers to absorb costs of upgrading to new versions. Developers should review Section 19 of the updated terms carefully before creating or maintaining integrations with Gusto's platform, and consider whether the arbitration and modification provisions align with their business and legal risk tolerance.
View change record →Removal of this high-severity cap on Gusto's liability (previously limited to 12 months of fees paid) eliminates a crucial protection for employers and could expose them to uncapped damages claims.
View full change record →A business that processes a multi-million dollar payroll through Gusto but pays a few thousand dollars per year in platform fees could face a situation where a significant payroll error results in recoverable damages capped at the fee amount, not the payroll value. This cap significantly limits practical recourse for high-value payroll errors.
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If you knowingly misrepresent that any activity or material on our Services is infringing, you may be liable to ActiveCampaign for certain costs and damages.
A party's liability for any Liability under these Terms will be reduced proportionately to the extent the relevant Liability was caused or contributed to by the actions (or inactions) of the other party...
The Netflix service and/or some of the Netflix content may not be available at any time as a result of events beyond our reasonable control...we will not be held liable should such events occur.
"IN NO EVENT WILL GUSTO'S TOTAL CUMULATIVE LIABILITY TO YOU OR ANY OTHER PARTY FOR ANY LOSS OR DAMAGES RESULTING FROM CLAIMS, DEMANDS, OR ACTIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT EXCEED THE TOTAL AMOUNT OF FEES PAID BY YOU TO GUSTO DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH CLAIM.Excerpt from Gusto's Terms of Service
REGULATORY LANDSCAPE: Limitation of liability clauses are generally enforceable in commercial contracts under US common law, subject to exceptions for gross negligence, willful misconduct, or fraud.
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For businesses that process large payrolls, the actual financial harm from a payroll processing failure could far exceed twelve months of Gusto subscription fees, leaving the employer-customer absorbing most of the loss.
A business that processes a multi-million dollar payroll through Gusto but pays a few thousand dollars per year in platform fees could face a situation where a significant payroll error results in recoverable damages capped at the fee amount, not the payroll value. This cap significantly limits practical recourse for high-value payroll errors.
ConductAtlas has identified this type of provision across 287 platforms. See the full comparison.
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