What is an Exculpatory Clause?

An exculpatory clause is a provision in a contract relieves a party from liability resulting from the execution of a contract. That is, it is used to relieve a party to a contract from liability for errors that occur during a project draw. It is commonly used to protect one party from blamed for damage caused by that party’s workers or subcontractors during the execution of a project.

An exculpatory clause often favors that drawer of the clause or the person that drafted an agreement. A good example is a laundryman drafting an exculpatory clause which relieves him of liability resulting from damages caused by the washing machine or iron during the laundry process.