• Robert Stines

$100 Limit To Liability

If you've read the Terms of Use or Terms of Service for online platforms, you'll notice that most have a section that limits liability. Limitation of liability provisions serve as an attempt to limit the amount of money online providers have to pay users for wrongful acts. Generally, state law requires that a limitation of liability provision has to be reasonable, clear, and conspicuous.


For some reason, many online providers limit liability to $100.


Facebook states:

Our aggregate liability arising out of or relating to these Terms or the Facebook Products will not exceed the greater of $100 or the amount you have paid us in the past twelve months.

Twitter's terms state:

IN NO EVENT SHALL THE AGGREGATE LIABILITY OF THE TWITTER ENTITIES EXCEED THE GREATER OF ONE HUNDRED U.S. DOLLARS (U.S. $100.00) OR THE AMOUNT YOU PAID TWITTER, IF ANY, IN THE PAST SIX MONTHS FOR THE SERVICES GIVING RISE TO THE CLAIM.

SnapChat has similar language that states:

IN NO EVENT WILL SNAP INC.’S AGGREGATE LIABILITY FOR ALL CLAIMS RELATING TO THE SERVICES EXCEED THE GREATER OF $100 USD OR THE AMOUNT YOU PAID SNAP INC., IF ANY, IN THE LAST 12 MONTHS

Why $100?

Are all these social media companies copying each other? Who decided that $100 was a reasonable amount?


This number may have come from old cases in which common carriers would limit their liability to $100. There are cases as far back as 1898 that uphold $100 as a reasonable limit of liability. Calderon v. Atlas S.S. Co., 18 S.Ct. 588, 589, 170 U.S. 272, 274 (U.S. 1898)


Assuming the US dollar experienced an average inflation rate of 3.12% per year during this period, $100 in 1898 would be worth over $2,500 today. So why stick with $100 for over one hundred years? It would seem that the $100 value is outdated and unreasonable.


But then, consider that you don't pay anything to use Facebook, Twitter or Snapchat. For a free service, maybe $100 is reasonable.


Does it Really Matter?

Despite these terms of service agreements that attempt to limit liability, these online platforms are still being sued for amounts in excess of the $100 limit.


Yes, online platforms have tried to impose the $100 limit, but it's not always successful.


One of the primary reasons for the lack of success is that the law does not allow companies to limit their liability for their negligent acts. Meaning, if a company (including on online platform) was negligent, and this negligence caused you harm, you can seek the amount of money that will make you whole and compensate you for the harm -- limits of liability be damned!


The tough part is proving that an online platform caused harm in excess of $100. This is generally the issue in any cyber related claim: How does a cyber event cause financial, physical or emotional harm to users?


Online platforms will attempt to use these contractual terms to limit liability. But, in my humble opinion (and I'm willing to bet others share this opinion), it doesn't really matter whether there is an outdated, random dollar amount in these contractual provisions - $100, $1,000, $10,000. What really matters is what users can prove in terms of harm . . . No harm, no liability.


~ Florida Cyber Lawyer, Robert Stines, Esq., CIPP





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