Limitation of Liability

What it is

The agreement caps LlamaIndex's total liability for any claims at the greater of amounts paid by the user or $100 USD, and excludes all indirect, consequential, punitive, and exemplary damages including loss of data, profits, or goodwill.

Why it matters (compliance & governance perspective)

This provision establishes a combined damages exclusion and aggregate liability cap that limits LlamaIndex's financial exposure to $100 or amounts paid, whichever is greater, regardless of the nature or extent of harm alleged. The exclusion of data loss damages is particularly relevant given that the Service processes user documents and data.

Consumer impact (what this means for users)

Under this clause, users' ability to recover damages from LlamaIndex for claims arising from the Service is capped at the greater of fees paid or $100 USD, and the agreement excludes recovery for loss of data, loss of profits, and other indirect or consequential damages. Some jurisdictions do not permit these exclusions, and the agreement acknowledges that applicable law may limit their effect.

Institutional analysis (regulatory & governance intelligence)

1. REGULATORY LANDSCAPE: Limitation of liability clauses in consumer contracts may be subject to unconscionability challenges under state contract law and consumer protection statutes. The Uniform Commercial Code and common law in various jurisdictions impose constraints on liability limitations in commercial contracts, particularly where the limitation fails of its essential purpose. The FTC Act engages limitations of liability that effectively leave consumers without meaningful remedy for deceptive or negligent conduct. 2. GOVERNANCE EXPOSURE: Medium. For enterprise users processing significant volumes of proprietary documents through the Service, the $100 aggregate cap creates a significant asymmetry between the potential value of data at risk and the maximum recoverable amount. The exclusion of data loss damages is operationally notable given the Service's core function involves document indexing and retrieval. 3. JURISDICTION FLAGS: Several U.S. states limit the enforceability of consequential damages exclusions in consumer contracts. EU consumer protection law (EU Consumer Rights Directive and national implementations) generally prohibits contractual limitations that exclude or limit liability for damages caused by the service provider's fault in consumer contracts. New Jersey and certain other states apply heightened scrutiny to liability caps in consumer-facing agreements. 4. CONTRACT AND VENDOR IMPLICATIONS: Enterprise procurement teams should evaluate whether the $100 liability cap is acceptable given the volume and sensitivity of data processed through the Service. In commercial negotiations, organizations may seek to negotiate a higher aggregate liability cap through a separate enterprise agreement. The disclaimer of liability for unauthorized access to servers and personal information stored therein is a specific provision that may interact with enterprise data protection obligations. 5. COMPLIANCE CONSIDERATIONS: Organizations using LlamaIndex to process personal data should assess whether the limitation of liability is compatible with their own data processor agreements and regulatory obligations. Where LlamaIndex processes data subject to GDPR, HIPAA, or other sector-specific frameworks, the $100 liability cap may not adequately address regulatory exposure arising from a data breach or service failure.

Applicable agencies

Provision details

Other risks in this policy

• Prohibition on AI Training Use of Service Content medium
• Class Action and Jury Trial Waiver high
• Fees Must Be Paid in Advance and Are Non-Refundable high
• LlamaIndex Aggregate Liability Cap at $100 or Amount Paid high
• LlamaIndex May Change or Discontinue Service Without Notice high
• LlamaIndex May Terminate or Suspend Access Without Cause high