How to Review a Fraud Carve-Out from an Aggregate Liability Ceiling

Friday 9 October 2026 is the signature date. Rhian reviews a 15-person UK brand of cork-backed slate serving boards. Fee £18,000. English law. Courts of England and Wales.

The packet — the papers you will actually sign — is a fulfilment MSA — a master services agreement — with Haven Pack Ltd in Birmingham.

The hidden risk is one short exception. Fraud is not a master key.

For example, clause 15.1 caps liability at fees paid in the prior twelve months: £18,000. Clause 15.2 lifts only that clause, and only for death or personal injury caused by negligence, or for fraudulent misrepresentation.

Clause 15.3 excludes indirect or consequential loss, including loss of profit. It never mentions fraud.

In September a clerk marked 420 boards delivered. They were still in the cage. The false dispatch log is a chargeback of about £6,400, under £18,000 if the ceiling holds.

Slack also wants £40,000 of lost listing treated as outside both limits. That 1 October note is the pressure. It calls the clerk the company.

In practice a narrow exception can leave a dishonest breach inside both limits. The typical mistake is reading fraud as if they had already opened.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

How do you separate inducing fraud from performance fraud?

A lie that gets the MSA signed is a different problem from a dishonest act in performance. Do copy that split. Do not treat 15.2 as proof that all fraud is uncapped.

Lord Bingham in HIH [2003] UKHL 6: a party cannot exclude its own fraud in inducing the contract. An agent's inducing fraud needs clear words. General words will not do. See HIH [2003] UKHL 6.

Gross J in Frans Maas v Samsung [2004] EWHC 1502 (Comm) at [31]: parties do not contemplate fraud in the making of a contract. Deliberate wrongdoing in performance is construction. That sentence is his, not Lord Hoffmann's. See Frans Maas [2004] EWHC 1502.

CMS, 2 February 2024, takes the same split from Innovate Pharmaceuticals Ltd v University of Portsmouth [2024] EWHC 35 (TCC). Inducing fraud cannot be excluded. Fraud in performance is a drafting choice. See CMS, 2 February 2024.

Write “not a court finding” on the £6,400 row.

Which fraud words are printed on this ceiling?

Do copy the printed label. Do not upgrade it. The page says fraudulent misrepresentation, not fraud or wilful misconduct.

Gowling WLG, 29 February 2024, on Innovate [2024] EWHC 35 (TCC): a £1 million cap except death, personal injury, or fraudulent misrepresentation. No reliance was pleaded. No dishonesty was found, so the point is obiter. See Gowling WLG, 29 February 2024.

CMS: lost profit from a non-representation breach stayed excluded even if the breach was fraudulent. Other claims stayed at £1 million. The fee was about £50,000 against a claim up to about £100 million. Colour only.

Addleshaw Goddard, 3 June 2024, says decide this expressly. Cite [2024] EWHC 35, not the 2023 number on that page. See Addleshaw Goddard, 3 June 2024.

Wilful misconduct is a different dictionary. Use the gross negligence and wilful misconduct guide, then stop. If Slack says wilful default, stop. This page does not open that label.

What does the carve-out actually lift?

Do mark which clause the exception points at. Do not assume it opens the lost-profit line. Clause 15.2 says nothing in clause 15.1. Clause 15.3 is silent on fraud.

In Innovate the profit exclusion and the £1 million cap were different sentences. A dishonest breach that was not a representation stayed inside both.

What “consequential” means is a different review. Use the consequential-loss guide, then come back. The £40,000 listing is not already outside clause 15.3 because someone said fraud.

Workflow: 15.1 → 15.2 → 15.3 → whose name is missing → name the circle, widen, or walk.

Whose fraud should you review before you sign?

Do write three buckets: the contracting company, named officers, or any employee. Do not tick “the clerk is the company.” This packet names nobody.

Gowling: it is easier to limit an employee's dishonesty in performance than the company's own fraud. Limiting the company's own dishonesty may be possible in principle. That signal is obiter.

CMS calls a cap on the company's own fraud in performance apparently unprecedented, and hard to square with HIH. Do not pick a winner for Haven Pack Ltd.

Frans Maas at [30] and [84]: employee dishonesty can sit inside a clear limit, and nobody was the company's alter ego. About 26,000 phones. Not this MSA.

In Interactive E-Solutions [2018] EWCA Civ 62, Lewison LJ required fraud as a necessary ingredient of the claim. Background dishonesty was not enough. A US$55 million counterclaim stayed outside. A false log is not automatically that ingredient. See One Essex Court note.

When to leave the cap number and the other carve-outs?

Whether £18,000 is the right ceiling is a different review. Use the liability-cap guide, then come back. Do not redo the number. £6,400 does not decide Friday.

An injunction is a different review. One sentence in the injunctive-relief carve-out guide, then stop.

A higher ceiling for data or confidentiality is a different review. One sentence in the data and confidentiality super-cap guide, then stop.

Do not rebuild the gross-negligence dictionary here. Leave death and personal injury where 15.2 put them.

What to write, widen, or walk away from?

If you want only deceit that induced the MSA, keep fraudulent misrepresentation. Still name the circle, and say whether the words touch 15.1 only or 15.3 as well.

If Friday's yes needs a dishonest performance, and the £40,000 listing, outside both limits, these words do not say that. Widen them on purpose, or walk.

Before you sign, use a checklist. Pause if the only support is that fraud lifts both limits. Negotiate the circle. Escalate both figures. Verify that 15.3 is still silent.

Sign when the circle and the clauses match the deal you mean. Resolve that before the signature. Do not sign because £6,400 is under £18,000.

Then upload the same file. Flags highlight those words on that file. A human still fills the log. Open document analysis.