Limitation of Liability ("LoL") is one of the key clauses for all types of service contracts including IT Outsourcing contracts.
We evaluate that it is vital for IT Outsourcing companies to incorporate a LoL clause in their agreements. This way the contract and risks become more predictable for the IT Outsourcing company.
In most cases, IT Outsourcing companies in Turkey tend to use standard contracts that are translations from English to Turkish. As these contracts have been prepared for other jurisdictions, some clauses, including the LoL, may not be enforceable in Turkey.
LoL clauses are applicable in Turkey pursuant to Code of Obligations Art. 115, however, there are certain limits as to what liability can be limited. Pursuant to Art. 115, liability arising from intentional tort and gross negligence cannot be limited or waived. Therefore it is only possible to waive or limit liability that may occur from slight negligence.
Further, it is enforceable to limit liability from slight negligence to a certain monetary limit.
Please be informed that provisions which exclude or limit liability arising from willful misconduct or gross negligence are null and void.
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