Microsoft limits its financial liability to you to direct damages only, excluding lost profits, data loss, or other consequential harms, even if Microsoft knew those harms were possible.
This analysis describes what Microsoft Copilot'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 Microsoft service fails and causes you significant harm, such as loss of important data or business disruption, you may be unable to recover the full extent of your losses because of this liability cap.
Interpretive note: Enforceability of consequential damages exclusions varies by jurisdiction, and applicable consumer protection statutes in the EU, UK, and certain US states may limit or override this provision.
This clause means that if Microsoft's services cause significant harm, such as data loss from OneDrive or errors from Copilot output, users may be limited in the damages they can recover, particularly for indirect or consequential losses.
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To the maximum extent permitted by applicable law, Kit 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, resulting ...
To the maximum extent permitted by applicable law, Pinterest 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, res...
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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"TO THE EXTENT PERMITTED BY LAW, MICROSOFT AND ITS AFFILIATES, RESELLERS, DISTRIBUTORS, AND VENDORS WILL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, OR DAMAGES FOR LOSS OF PROFITS, REVENUES, DATA, BUSINESS OR GOODWILL, EVEN IF MICROSOFT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.— Excerpt from Microsoft Copilot's Microsoft Copilot Terms of Service
(1) REGULATORY LANDSCAPE: Limitation of liability clauses in consumer contracts may be subject to statutory controls under EU Directive 93/13/EEC on unfair contract terms, which generally prohibits terms that inappropriately limit liability for harm caused by the service provider. UK consumer rights law similarly scrutinizes broad liability exclusions in consumer contracts. Under US law, such clauses are generally enforceable subject to state-specific rules; some states limit the enforceability of consequential damages waivers in consumer contracts. (2) GOVERNANCE EXPOSURE: Medium. The clause is common across major technology providers' consumer agreements and follows standard industry practice. However, for AI-powered services like Copilot where outputs could directly inform user decisions, the exclusion of consequential damages may become a more significant consumer concern as AI reliance increases. (3) JURISDICTION FLAGS: EU and UK users may have mandatory statutory rights that cannot be excluded by contract, meaning portions of this clause may be unenforceable in those jurisdictions. New Jersey, Massachusetts, and other states with strong consumer protection statutes may limit enforceability of consequential damages waivers. (4) CONTRACT AND VENDOR IMPLICATIONS: Enterprises relying on consumer terms should note that the liability limitations are substantially narrower than those typically negotiated in commercial agreements. For AI-related services, the absence of specific AI output liability language is notable given evolving regulatory expectations. (5) COMPLIANCE CONSIDERATIONS: Legal teams advising on AI use cases should assess whether the limitation of liability is adequate given the intended use of Copilot outputs and whether additional contractual protections or insurance coverage are warranted.
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If a Microsoft service fails and causes you significant harm, such as loss of important data or business disruption, you may be unable to recover the full extent of your losses because of this liability cap.
This clause means that if Microsoft's services cause significant harm, such as data loss from OneDrive or errors from Copilot output, users may be limited in the damages they can recover, particularly for indirect or consequential losses.
ConductAtlas has identified this type of provision across 266 platforms. See the full comparison.
No. ConductAtlas is an independent monitoring service. We are not affiliated with, endorsed by, or sponsored by Microsoft Copilot.