Search results
Aug 9, 2023 · Learn what indemnification clauses are, how they shift risks and costs between parties, and how they are enforced by courts. Download a sample indemnification clause and commentary to draft contracts faster and more effectively.
People also ask
What is an indemnity clause in a service contract?
What is an example of an indemnity clause?
Are indemnification clauses enforceable?
What are the different types of indemnification clauses?
Learn what indemnity clauses are, how they protect parties from third-party claims, and what types of indemnity clauses exist. See examples and samples of indemnity clauses in different contracts and agreements.
- What Is Indemnification?
- Why Are Indemnification Provisions Important?
- What Are The Components of A Typical Indemnification Clause?
- Obligation to Indemnify
- Obligation to Defend
- “Hold Harmless” Provisions
- Covered Events
- Recoverable Damages
- Nexus Phrases
- What Are The Common Exceptions to Indemnification?
Indemnification, also referred to as indemnity, is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims. Indemnification can also cover direct claims, which are claims or causes of action that one contracting party has ag...
Indemnification clauses allow a contracting party to: 1. Customize the amount of risk it is willing to undertake in each transaction and with every counterparty 2. Protect itself from damages and lawsuits that are more efficiently borne by the counterparty For example, in a sale of goods agreement, the risk that a product injures a third party is m...
A typical indemnification clause consists of two separate and distinct obligations: an obligation to indemnify, and an obligation to defend.
The obligation to indemnify requires the indemnifying party to:Reimburse the indemnified party for its paid costs and expenses, referred to as losses.Advance payment to the indemnified party for its unpaid costs and expenses, such as:For the indemnifying party, the obligation to defend consists of both: 1. An obligation. The indemnifying party must: 1.1. Reimburse paid defense costs and expenses 1.2. Make advance payment for unpaid defense costs and expenses 2. A right.The indemnifying party has the right to assume and control the defense of the third-party suit. The obligation...
Most indemnification provisions require the indemnifying party to "indemnify and hold harmless" the indemnified party for specified liabilities. In practice, these terms are typically paired and interpreted as a unit to mean "indemnity." However, in some states, the phrase "hold harmless" may require the indemnifying party to advance payment for co...
Covered events are specific types of events that are listed in the indemnification clause. They can vary according to the particulars of the transaction and are subject to negotiation. The most common covered events are: 1. Breach of contract 2. Negligence 3. Bodily injury or death 4. Non-compliance with any laws
Recoverable damages are specific types of damages listed in the indemnification clause. These can vary and are negotiated by the parties. The principal categories of recoverable damages are: 1. Losses.Losses include any covered judgments, settlements, fees, costs, and expenses. The indemnifying party becomes responsible for a loss only after the in...
The phrases "caused by," "related to," and "resulting from" are referred to as nexus phrases. Nexus phrases link the recoverable damages to the covered events. These phrases are typically negotiated by the parties because they either broaden or limit the obligation to indemnify. The indemnified party typically wants to use a broad nexus phrase, suc...
There are a number of common exceptions to indemnification. They generally relate to circumstances where the indemnified party's own actions either cause or contribute to the harm that triggers indemnification. For example, an indemnification provision may exclude indemnification for claims or losses that result from the indemnified party's: 1. Neg...
Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless agains...
May 5, 2023 · Learn what indemnification clauses are, why they are used, and how they work in contracts. Find out how to draft and negotiate indemnification provisions to protect your rights and interests.
- The following is an example of a basic mutual indemnification provision. Remember, any indemnity must be tailored to your specific needs.“Each part...
- Let’s say you commission a writer to prepare a speech for you on a work-for-hire basis. Instead of delivering an original speech as promised under...
- Before agreeing to an indemnification, read it carefully and make sure your obligations are limited to your own mistakes or misconduct. In the samp...
- Indemnification provisions are generally enforceable. There are certain exceptions however. Indemnifications that require a party to indemnify anot...
Feb 25, 2024 · Indemnity is a form of insurance compensation or a legal exemption from liability for damage. Learn about indemnity clauses, indemnity insurance, and acts of indemnity in different contexts and scenarios.
Feb 1, 2023 · An indemnity clause is a contract term that shifts the risk and cost of certain losses or damages from one party to another. Learn what indemnity means, how to read and negotiate indemnity clauses, and when to buy indemnity insurance.
