Also known as: caps · capped · capping · ceiling · limit · limitation
Written by attorneys · grounded in primary & secondary sources — see below
An upper limit on recovery, interest rates, damages, or other obligations. The limit may be statutory, contractual, or judicial and bars amounts exceeding the threshold even when liability or loss is otherwise established.
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Claire Campbell purchased property from Copperfield Mining under a contract containing a merger clause. After closing she discovered an oral promise about mineral rights that was never placed in the deed. The clause caps her remedies at the deed terms alone, preventing enforcement of the prior promise.
Carlos Castillo asked his lawyer to file a pleading that would violate a court order. The lawyer recognized the request exceeded permitted conduct and consulted Carlos about the limitation before refusing to proceed.
Carmen Choi and her spouse signed a separation agreement that the court incorporated into the divorce decree. The decree expressly capped future modification of property-division terms, so the court later refused to alter those provisions even though income had changed.
Cade Carpenter held a beneficial interest in a trust without a spendthrift provision. A judgment creditor obtained a court order attaching future distributions, but the court capped the attachment to amounts reasonably necessary to satisfy the debt without destroying the trust purpose.
Colin Chambers received a conveyance of land stated to continue only so long as the parcel remained agricultural. The estate is subject to a special limitation that automatically caps duration upon the stated event, converting the interest into a fee simple absolute until that event occurs.
Cobalt Energy sold commercial equipment to Cascade Manufacturing under a contract excluding consequential damages. When the equipment failed, the buyer sought lost profits. The exclusion capped recovery at direct damages because the transaction was commercial and the clause was not unconscionable.
A cap sets the maximum amount a party may recover regardless of actual loss. It prevents recovery of amounts above the stated ceiling even when liability is clear.
Supporting sources
A statutory cap is imposed by legislation and cannot be waived by private agreement. A contractual cap is negotiated by the parties and is enforceable unless unconscionable or against public policy.
Supporting sources
A cap on consequential damages for personal injury in consumer goods is presumed unconscionable. In commercial transactions the same cap is ordinarily valid.
…is no support in the Securities Exchange Act, the Rule, or our cases for such a result. B But even as the Court attempts to limit the fraud-on-the-market theory it endorses today, the pitfalls in its approach are revealed by previous uses by the lower courts of the broader versions of the theory. Confusion and…