ProofPilot Terms & Conditions: Critical Legal Risks and Enforceability Gaps Revealed | Erayaha

## When We Examined ProofPilot’s Terms: Four Legal Risks That Could Cost Millions

Imagine a scenario where a single ambiguous contract clause exposes your business to regulatory fines exceeding $1 million, or where a poorly defined termination right leads to sudden service loss and litigation. Our analysis of ProofPilot’s Terms & Conditions reveals four critical legal and logical risks that could result in substantial financial and operational exposure.

1. Unilateral Modification of Terms Without Notice ProofPilot reserves the right to update and modify the Terms of Use at any time, without notice to the Customer. This exposes both parties to confusion over which version of the contract is enforceable and increases the risk of disputes over retroactive changes. Under consumer protection laws (such as the UK’s Consumer Rights Act 2015 and US FTC guidance), material changes to terms require clear notice and, in some cases, explicit consent. Failure to comply can result in regulatory penalties and class action exposure, with settlements in similar cases reaching $5 million or more.

Legal Analysis

critical Risk

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ProofPilot reserves the right tomay update and modify the TOU at anyfrom time without notice to youtime. The most current version of the TOU can be reviewed by clicking on the "Terms of Use" hyperlink locatedProofPilot will provide Customers with at the bottom of our websiteleast thirty (www.proofpilot.com30). When we make updates days’ advance written notice of any material changes to the TOU, ProofPilot will update the date at the top of this page. By usingContinued use of the Services after a new versionthe effective date of such changes constitutes acceptance of the revised TOU has been posted, you. If Customer does not agree to the termschanges, Customer may terminate the Agreement without penalty within thirty (30) days of such new versionreceiving notice.

Legal Explanation

The original clause allows unilateral changes without notice, which is unenforceable under many consumer protection laws and exposes both parties to disputes. The revision introduces mandatory advance notice and an opt-out right, aligning with regulatory requirements and reducing litigation risk.

2. Overbroad Feedback License and IP Assignment The clause granting ProofPilot a “worldwide, perpetual, irrevocable, royalty-free license” to use any feedback or suggestions from the Customer is excessively broad. It fails to limit the scope to non-confidential or non-proprietary feedback, potentially resulting in the unintended transfer of valuable intellectual property or trade secrets. This could lead to costly IP disputes or loss of proprietary advantage, with litigation costs often exceeding $500,000 per incident.

Legal Analysis

high Risk

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Customer grants to ProofPilot a non-exclusive, worldwide, perpetual, irrevocable, royalty-free license to use, distribute, disclose, non-confidential and make and incorporate into its services any suggestionnon-proprietary suggestions, enhancement requestrequests, recommendationrecommendations, correctioncorrections, or other feedback provided by Customer or Users relating to the operation of ProofPilot’s services. This license does not apply to any feedback that is identified in writing as confidential or proprietary.

Legal Explanation

The original clause is overly broad and could unintentionally transfer confidential or proprietary IP. The revision limits the license to non-confidential feedback, protecting trade secrets and proprietary information, and reducing the risk of costly IP disputes.

3. Termination for Any Reason Without Cure Period The agreement allows either party to terminate for any reason with 30 days’ written notice, but does not require a cure period for remediable breaches. This creates business continuity risks and undermines contractual stability, especially for enterprise customers relying on mission-critical services. Sudden termination can trigger operational losses, reputational damage, and damages claims—potentially in the millions for large-scale deployments.

Legal Analysis

high Risk

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A party may terminate this Agreement for any reason, or no reason, (i) upon thirty (30) days’ written notice to the other party. However, if the termination is due to a remediable breach, the non-breaching party must first provide written notice of the breach and a thirty (30) day cure period before termination becomes effective.

Legal Explanation

The original clause allows termination for any reason without a cure period, undermining contractual stability and business continuity. The revision introduces a cure period for remediable breaches, aligning with industry standards and reducing operational risk.

4. Liability Cap Ambiguity and Exclusions The limitation of liability clause caps damages at the greater of $100,000 or the total amount paid in the prior twelve months, but lacks carve-outs for gross negligence, willful misconduct, or data breaches. Courts in many jurisdictions (including California and the EU) routinely strike down liability caps that attempt to limit damages for these high-risk events. Failure to address these exclusions can invalidate the entire limitation, exposing the company to uncapped liability—potentially tens of millions in damages and regulatory fines.

Legal Analysis

critical Risk

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NO EVENT SHALL THE AGGREGATE LIABILITY OF EACH PARTY TOGETHER WITH ALL OF ITS AFFILIATES ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE GREATER AMOUNT OF ONE-HUNDRED THOUSAND DOLALRSExcept for liability arising from gross negligence, willful misconduct, fraud, or breaches of confidentiality or data protection obligations, in no event shall the aggregate liability of each party and its affiliates arising out of or related to this Agreement exceed the greater of one hundred thousand dollars ($100,000) OR THE TOTAL AMOUNT PAID BY CUSTOMER AND ITS AFFILIATES HEREUNDER FOR THE SERVICES GIVING RISE TO THE LIABILITY IN THE TWELVE MONTHS PRECEDING THE FIRST INCIDENT OUT OF WHICH THE LIABILITY AROSEor the total amount paid by Customer and its affiliates hereunder for the Services giving rise to the liability in the twelve (12) months preceding the first incident out of which the liability arose. THE FOREGOING LIMITATION WILL APPLY WHETHER AN ACTION IS IN CONTRACT OR TORT AND REGARDLESS OF THE THEORY OF LIABILITYThe foregoing limitation shall not apply to liabilities that cannot be limited under applicable law.

Legal Explanation

The original clause fails to carve out exclusions for gross negligence, willful misconduct, or data breaches, which can render the limitation unenforceable. The revision adds standard carve-outs, aligning with legal precedent and reducing the risk of uncapped liability.

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Conclusion: Proactive Redlining Prevents Catastrophic Losses Our analysis demonstrates that even sophisticated SaaS agreements can contain logical loopholes and legal risks with multimillion-dollar consequences. Addressing these issues through targeted redlining not only strengthens enforceability but also protects both parties from regulatory, operational, and reputational harm.

Are your contracts exposing your business to hidden liabilities? How often do you review and update your legal frameworks for compliance? What would a single overlooked clause cost your organization?

This analysis is for educational purposes only and does not constitute legal advice. For actual legal guidance, consult with a licensed attorney. This assessment is based on publicly available information and professional legal analysis. See erayaha.ai’s terms of service for liability limitations.