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FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.246-25 Limitation of Liability—Services.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This clause limits a services contractor's liability for loss or damage to Government property that occurs after the Government accepts the services and results from defects or deficiencies in those services or furnished materials. However, the limitation does not apply if the defect, deficiency, or acceptance resulted from willful misconduct or lack of good faith by the contractor's managerial personnel, or if the contractor has insurance or a self-insurance reserve covering such liability.

Applies to: Contractors performing services for the Government under a contract that includes this clause.

What it requires

  • Be liable to the Government, to the extent of any insurance or self-insurance reserve, for loss or damage to Government property occurring after acceptance and resulting from defects or deficiencies in services or materials.

Key terms: Contractor's managerial personnel · willful misconduct · lack of good faith · Government acceptance · self-insurance

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

As prescribed in 46.805, insert the following clause:

Limitation of Liability—Services (FEB 1997)

(a) Except as provided in paragraphs (b) and (c) below, and except to the extent that the Contractor is expressly responsible under this contract for deficiencies in the services required to be performed under it (including any materials furnished in conjunction with those services), the Contractor shall not be liable for loss of or damage to property of the Government that (1) occurs after Government acceptance of services performed under this contract and (2) results from any defects or deficiencies in the services performed or materials furnished.

(b) The limitation of liability under paragraph (a) above shall not apply when a defect or deficiency in, or the Government's acceptance of, services performed or materials furnished results from willful misconduct or lack of good faith on the part of any of the Contractor's managerial personnel. The term Contractor's managerial personnel, as used in this clause, means the Contractor's directors, officers, and any of the Contractor's managers, superintendents, or equivalent representatives who have supervision or direction of—

(1) All or substantially all of the Contractor's business;

(2) All or substantially all of the Contractor's operations at any one plant, laboratory, or separate location at which the contract is being performed; or

(3) A separate and complete major industrial operation connected with the performance of this contract.

(c) If the Contractor carries insurance, or has established a reserve for self-insurance, covering liability for loss or damage suffered by the Government through the Contractor's performance of services or furnishing of materials under this contract, the Contractor shall be liable to the Government, to the extent of such insurance or reserve, for loss of or damage to property of the Government occurring after Government acceptance of, and resulting from any defects and deficiencies in, services performed or materials furnished under this contract.

(End of clause)

Sections it refers to

Sections that refer to it

← 52.246-24 Limitation of Liability—High-Value Items. · 52.246-26 Reporting Nonconforming Items. →

Rule changes for FAR Part 52

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 52.246-25 Limitation of Liability—Services · SpendQuery