Square limits its financial responsibility if the service fails, is unavailable, or is hacked. Users cannot seek indirect or consequential damages from Square, even if a service outage or security breach causes real financial harm.
This analysis describes what Square'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 Square service outage prevents a merchant from processing payments during a busy period, or if a security breach exposes customer payment data, the limitation of liability clause means merchants may have very limited financial recourse against Square for resulting losses.
Interpretive note: Enforceability of liability exclusions for security breaches may be constrained by applicable state data security law or regulatory standards independent of this contract's terms.
The updated terms modify how arbitration disputes are resolved when 25 or more similar claims are brought against Square. Previously, Square's terms referenced 'Bellwether Arbitration procedures' under which test cases would be selected and remaining demands could proceed individually under standard rules if settlement failed. The updated framework establishes a mandatory mediation phase after initial arbitrations resolve, and requires remaining claims to proceed in batches of up to 100 rather than individually, with one arbitrator and consolidated fees per batch. This may reduce the procedural flexibility for claimants pursuing claims outside the initial test-case group, though the batch structure may reduce overall administrative costs. The terms now explicitly state that NAM shall administer batches concurrently and that parties will engage in a 'single global mediation' before batch proceedings commence.
View change record →Text now includes explicit caps lock formatting and expanded language covering processors, suppliers, licensors and their affiliates, making the liability restriction more comprehensive.
View full change record →Merchants cannot recover consequential or indirect damages from Square for service failures or security incidents, which means that lost sales revenue, reputational harm, or costs of notifying customers after a breach would typically not be recoverable under this agreement.
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"IN NO EVENT WILL SQUARE, ITS PROCESSORS, SUPPLIERS OR LICENSORS (OR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES) BE LIABLE FOR ANY INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR EXEMPLARY DAMAGES ARISING OUT OF, IN CONNECTION WITH, OR RELATING TO THIS AGREEMENT OR THE SERVICES, INCLUDING WITHOUT LIMITATION THE USE OF, INABILITY TO USE, OR UNAVAILABILITY OF THE SERVICES. UNDER NO CIRCUMSTANCES WILL ANY OF SUCH PERSONS OR ENTITIES BE RESPONSIBLE FOR ANY DAMAGE, LOSS, OR INJURY RESULTING FROM HACKING, TAMPERING, OR OTHER UNAUTHORIZED ACCESS OR USE OF THE SERVICES OR YOUR SQUARE ACCOUNT.Excerpt from Square's Terms of Service
REGULATORY LANDSCAPE: Limitation of liability clauses are generally enforceable under California law, which governs this agreement, subject to limitations where gross negligence or willful misconduct is involved.
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If a Square service outage prevents a merchant from processing payments during a busy period, or if a security breach exposes customer payment data, the limitation of liability clause means merchants may have very limited financial recourse against Square for resulting losses.
Merchants cannot recover consequential or indirect damages from Square for service failures or security incidents, which means that lost sales revenue, reputational harm, or costs of notifying customers after a breach would typically not be recoverable under this agreement.
ConductAtlas has identified this type of provision across 287 platforms. See the full comparison.
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