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  • Term

    Main definition

  • Capped

    When a maximum limit is placed it is called capping an amount and the limit itself is often called a cap.

    The effect of capping is to limit, but not below zero, an amount by mutual agreement. Negotiating, setting, performing under and exceeding a cap each has a different meaning in different contexts. One of the "capped" amounts in a definitive acquisition agreement can be a cap on indemnity, in which case then there is no obligation for indemnity beyond an amount that equals or is defined by the cap. If there is not a cap on a specified thing, then there is possibly too much for one party or the other or both. An unlimited amount of obligation or liability is never ideal. A indemnity liability cap is commonly called just a "cap".

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