A limitation of liability clause usually explains how much one party may have to pay if a contract claim arises.
The clause may include a financial cap, a method for calculating the cap, excluded types of loss, time limits for claims and carve-outs for risks that are not limited. Common carve-outs can include fraud, deliberate wrongdoing, confidentiality breaches, data protection issues, intellectual property claims or indemnity claims, depending on the contract.
These clauses need careful drafting because the exact wording and applicable law can affect whether the limitation works as intended.
This answer is general information, not legal advice.