Direct answer

Caps and exclusions can work, but several mandatory limits cannot be drafted away.

Commercial parties commonly cap damages at fees paid or exclude indirect loss. Under the Civil Code, standard-term and exclusion clauses that unreasonably allocate risk, and clauses that exclude liability for personal injury or for property loss caused by intent or gross negligence, are vulnerable. Consumer contracts, product liability, employment and some transport or public-service settings add further limits. A cap that leaves no meaningful remedy may also fail as a practical matter.

The classification screen

4 questions before you choose the route.

This page identifies the right question and evidence. It does not determine the legal outcome on a reader’s facts.

01

Is this a negotiated B2B term?

A one-sided website clickwrap is treated more strictly than a marked-up SPA.

Bargain
02

What loss are you excluding?

Indirect loss, data loss, recall cost and delay LD interact; list them expressly in both languages.

Scope
03

Does intent or gross negligence sit outside the cap?

Chinese law will not let you exclude those for personal injury or property damage.

Mandatory
04

Is a consumer or product in the chain?

Downstream product and consumer claims may ignore a B2B cap.

Consumer

Working rule: Map the regulated role before marketing or launch in China.

What changes the answer

The signal ledger.

These facts move the question beyond a label and into a product, money-flow and control analysis.

Signal
Ask the operating question
Why it changes the route
Standard terms
Was the cap buried in a template the other side could not negotiate?
Unreasonable standard terms can be invalidated even between companies.
Personal injury / intent
Could the breach cause injury, death, or loss from intent or gross negligence?
Those liabilities are not a free drafting zone.
Cap vs contract value
Does the cap leave a realistic remedy for the most likely breach?
A trivial cap on a high-risk supply deal is a dispute magnet.
Prepare before you escalate

Bring a compact evidence docket—not a pitch deck.

Give a compliance team or counsel the operating facts that reveal the perimeter.

01Clause in both languagesCap, excluded heads of loss, and carve-outs.
02Negotiation recordProof the limitation was discussed, not only attached.
03InsuranceWhether the cap matches available cover.
04Product / consumer chainWho the end user is and which mandatory regime applies.
Common confusions

Questions people ask before they build.

Short answers for orientation. The right result can change with the service model and current rules.

Can we exclude all lost-profit claims?

Often as a commercial starting point in B2B deals, but the clause must be clear in Chinese, must not cover intent or gross negligence for property damage or injury, and may still be adjusted if it is an unreasonable standard term.

Does a cap stop liquidated damages?

Only if the drafting says so in both languages. Otherwise you can face both a 违约金 claim and an argument about whether the cap applies.

Primary authorities

Reviewed sources support orientation, not a fact-specific assessment.

PRC Civil Code (gov.cn)
National laws database (NPC)
Supreme People’s Court