Contracts limiting liability to the state
N.D. Cent. Code § 32-12.2-15
in effect32-12.2-15. Contracts limiting liability to the state
1. Notwithstanding any provision in this chapter to the contrary, an agency may agree to
limit the liability of a contractor to the state if the agency determines such services or
products cannot be effectively obtained without such limitation and the limitation does
not pose any significant risk of loss to the state and is in the best interests of the state.
The agency, in consultation with the office of management and budget and the
attorney general's office, shall prepare a written documentation before agreeing to any
liability limitation. An agency's authority to agree to a limitation of liability is limited to
contracts for the purchase or lease of, or services related to, software, communication,
electronic equipment, and economic forecasting.
2. An agency may limit its ability to recover indirect consequential damages.
3. If the extent of potential direct loss is unknown, an agency may agree to limit direct
damages to a reasonably estimated amount commensurate with the foreseeable risk
of loss to the state. The amount must be equal to twice the total value of the contract,
unless all parties to the contract agree to an alternative amount. Any agreed upon
amount that is less than twice the value of the contract must be approved by the
director of the office of management and budget. The liquidated damages and
retainage provisions for delay, missed deadlines, and other breaches are not subject to
a general limitation on direct or indirect damages authorized under this section.
4. A contract under this section may not limit any loss to the state resulting from fraud or
other intentional or willful misconduct, breach of confidentiality obligations, or loss
resulting from tangible property damage or personal injury.
5. An agency may purchase routine or standardized products that contain adhesive
contract terms in shrink wrap documents, third-party end user license, or click-through
agreements that are not consistent with this section if the agency, in consultation with
the attorney general's office and the office of management and budget, determines the
purchase poses no reasonable risk that an improper contractual obligation will be
imposed against the agency or of loss that cannot be limited under this section given
the nature of the product's intended use, including data and system security. Routine
or standardized products are products that are commercially available to the public
which do not exceed twenty thousand dollars in cost.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t32c12-2.pdf#nameddest=32-12p2-15Fetched: 10/16/2026