MTI Statement of Limited Liability: The Power of Protection

In today’s litigious business climate, it’s critically important for a heat treating company to include the Metal Treating Institute’s Statement of Limited Liability in your terms and conditions.  MTI’s Statement of Limited Liability is a long-standing copyrighted document for use only by Members of the Metal Treating Institute. 

This one-page document has been tested in court and has saved numerous Members over the years from unreasonable claims.

 The following are key reasons for its inclusion in your quote and purchase order documentation:  

1. Risk Management in a High-Precision Industry

Heat treating involves complex processes with inherent risks such as:

• Material warping, cracking, or distortion
• Unexpected metallurgical changes
• Surface or internal failures after subsequent processing

Despite using best practices and known science, no result is guaranteed. This clause helps shield the company from unlimited liability when something goes wrong despite doing the job as specified.

2. Caps Liability Exposure

The clause limits the heat treater’s liability to twice the cost of the service performed, preventing:

• Large financial claims that could arise from downstream effects (e.g., production loss, recalls, lawsuits)
• Disproportionate risk compared to the relatively small value of the heat treating charge

3. Avoids Implied Warranties

It disclaims implied warranties like:

• Merchantability
• Fitness for a particular purpose

This prevents the customer from claiming that the treated parts were unsuitable for use—even if they failed after further processing or use in their application.

4. Shields Against Consequential Damages

It eliminates liability for:

• Loss of profits
• Production delays
• Personal injury or property damage
• Recall costs

Without this, a customer could try to recover extensive damages unrelated to the actual work performed.

5. Controls Contractual Terms

The statement ensures that the heat treater’s terms take precedence over any differing terms in the customer’s PO or documents, unless renegotiated and signed.

6. Establishes Clear Claims Process and Deadlines

It enforces:

• A 5-day window for identifying and reporting defects
• No liability once the treated parts are further processed

This protects the heat treater from being blamed long after the fact, especially if other variables or processes have affected the part.

Summary:

This clause is standard legal protection in the heat treating industry. It provides a reasonable, enforceable framework to:

• Protect the company from excessive legal exposure
• Establish fair expectations
• Prevent disputes over downstream damages
• Maintain the economic viability of the business

Without it, a single part failure could lead to litigation that could threaten the entire operation.

Don’t take the risk of having a single part failure, of a single project, put your company at risk. Make sure you have MTI’s Statement of Limited Liability in your quoting and purchase order documentation that you communicate to your customer.

As a Member, if you need a copy of MTI’s Statement of Limited Liability, contact Kristen Speer, MTI’s Director of Member Experience, at kristen@heattreat.net.