SWITZERLAND Law and Practice Contributed by: Dirk Spacek, Wenger Plattner
4.2 Liability Clauses A typical Swiss IT services liability clause addresses scope of liability, exclusions, limitations and allocation of risk between the parties. It usually includes liabil - ity for direct damages caused by breach of contract, gross negligence or wilful misconduct, while exclud - ing liability for indirect or consequential damages such as loss of profit, loss of data, business interruption or reputational harm. Liability is commonly capped, often by reference to fees paid under the agreement during a defined period (eg, 12 months). Under Swiss law, liability for unlawful intent (wilful misconduct) and gross negligence cannot be excluded in advance (Article 100, CO). Contracts regularly carve out certain damages from liability limi - tations (eg, for breach of confidentiality or data pro - tection). 4.3 Warranties Under Swiss law, IT services agreements typically include warranties relating to specific functionalities, ownership of intellectual property rights and non- infringement of third-party intellectual property rights, compliance and legal rights. Warranties are consid - ered strict liability commitments irrespective of each party’s fault. Performance standards (eg, services to be provided with due care and professional diligence, in accord - ance with industry standards or service levels) are typically not addressed within a warranty section as they relate mainly to the quality of performance, which is considered part of the diligence and care of a ser - vice provider. Under Swiss statutory default law provi - sions of the mandate agreement (Article 398 et seq, CO), the duty of diligence and care is considered an inherent and mandatory duty of a service provider. It is not subject to a warranty. Nonetheless – especially under Anglo-American-negotiated contracts – parties do sometimes agree to represent and warrant perfor - mance standards. In this case, they mutually agree to uplift the performance level to a strict liability level (as a warranty). From a data protection perspective, warranties com - monly include compliance with the FADP and imple -
• Liability risk – exposure to claims for errors, biased outputs, or regulatory violations. • Data compliance – ensuring adherence to the FADP, particularly when processing personal or sensitive data. • Intellectual property – protecting proprietary algo - rithms and balancing customer audit rights with confidentiality. • Regulatory uncertainty – navigating sectoral rules (finance, healthcare and transport) and the absence of a unified AI law. • Ethical and reputational risk – managing bias, transparency and fairness to maintain trust. • Contractual obligations – meeting performance, uptime, and explainability commitments while limit - ing exposure through liability caps and warranties. Under Swiss law, there is no codified “IT services act”. The provision of IT services is subject to a combina - tion of general civil, commercial, IP and data protec - tion laws. The CO governs contractual relationships, includ - ing service agreements, outsourcing, SaaS, software development and maintenance contracts. Depending on the contractual structure, default law provisions of the CO relating to mandates, work contracts or mixed contracts may apply. 4. IT Services 4.1 Overlay of Requirements In addition, providers must comply with the FADP, where personal data is processed, including obliga - tions relating to transparency, data security and pro - cessor arrangements. Sector-specific regulation may also apply on top. However, it is pertinent to men - tion that such regulation is mostly addressed to the customers of providers, which then try to shift/mirror these obligations in their contracts with the provider. Intellectual property laws govern ownership and licensing of providers’ software and deliverables. Swiss unfair competition, export control and cyber - security-related rules may further apply depending on the nature of the services provided.
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