OpenAI limits its legal liability to direct damages only and excludes indirect, consequential, or punitive damages in most scenarios, including situations where you cannot access or use the service.
This analysis describes what OpenAI'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
This provision caps the types of damages users can recover from OpenAI in a dispute, which is particularly significant given the mandatory arbitration clause that already limits the forum for such claims.
Interpretive note: The phrase 'to the extent permitted by law' creates jurisdiction-dependent variability; applicable consumer protection statutes in the EU, UK, and certain US states may limit the enforceability of this exclusion.
Users who suffer losses from service failures, data loss, or third-party conduct on OpenAI's platform are limited in the types of financial recovery they can seek; indirect and consequential losses, including lost business revenue or data loss, are excluded from OpenAI's liability under this clause.
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"To the extent permitted by law, neither OpenAI nor any of the OpenAI parties will 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 from: your use or inability to use the Services; any conduct or content of third parties on the Services; any content obtained from the Services; or unauthorized access, use, or alteration of your content.— Excerpt from OpenAI's Terms of Use (ROW)
REGULATORY LANDSCAPE: Limitation of liability clauses in consumer contracts may be unenforceable or subject to statutory minimum recovery rights under EU consumer law, UK Consumer Rights Act 2015, and various state consumer protection statutes. The phrase 'to the extent permitted by law' signals awareness that applicable law may constrain the clause's full effect. The FTC may examine limitations that effectively deny consumers any meaningful remedy for AI service failures. GOVERNANCE EXPOSURE: Medium. The clause is common in technology services but combined with the arbitration and class action waiver, it creates a layered limitation on consumer recourse. For enterprise users, exclusion of consequential damages including lost profits is operationally significant where AI service disruptions affect business operations. JURISDICTION FLAGS: EU consumers retain statutory rights that may override contractual liability exclusions, particularly for personal data breaches under GDPR. UK consumers have non-waivable rights under the Consumer Rights Act for services not performed with reasonable care and skill. California and other US states may have consumer protection statutes that limit the enforceability of blanket consequential damage exclusions. CONTRACT AND VENDOR IMPLICATIONS: Enterprise customers building commercial products on OpenAI services should assess whether this liability limitation, combined with OpenAI's termination rights, creates unacceptable business continuity risk. Vendors relying on OpenAI-generated outputs in high-stakes decisions should evaluate their own downstream liability exposure. COMPLIANCE CONSIDERATIONS: Legal teams should document the interplay between this limitation of liability and the indemnification obligation imposed on users; users are required to indemnify OpenAI fully while OpenAI limits its own liability, creating an asymmetric risk allocation that should be evaluated in contract review.
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This provision caps the types of damages users can recover from OpenAI in a dispute, which is particularly significant given the mandatory arbitration clause that already limits the forum for such claims.
Users who suffer losses from service failures, data loss, or third-party conduct on OpenAI's platform are limited in the types of financial recovery they can seek; indirect and consequential losses, including lost business revenue or data loss, are excluded from OpenAI's liability under this clause.
ConductAtlas has identified this type of provision across 266 platforms. See the full comparison.
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