Indemnity Provision

An Indemnity Provision is a contractual obligation provision that represents an indemnity obligation (defining the responsibilities of the indemnitor towards the indemnitee due to the relevant acts of the indemnitor or any other party).

• Context:
  • It can (often) be within an Indemnity Clause (and within an indemnificaiton article).
  • It can (typically) aim to protect parties from Contract-Related Financial Losses.
  • It can range from being a 1-Sentence Indemnity Provision, to being 2-Sentence Indemnity Provision to being a Several-Sentence Indemnity Provision.
  • It can range from being a 1-Element Indemnity Provision, to being 2-Element Indemnity Provision to being a Several-Element Indemnity Provision.
  • ...
• Example(s):
  • Indemnifying Party Provision, with the party responsible for providing compensation, such as:
    • “Contractor shall be the indemnifying party responsible for compensating any and all claims as described herein."
  • Indemnified Party Provision, with the party eligible to receive compensation, such as:
    • “The Company, as the indemnified party, shall be entitled to compensation for losses as outlined in this agreement."
  • Indemnification Event Provision, with the circumstances that trigger the compensation obligation, such as:
    • “This indemnification shall apply in the event of any breach of contract or violation of intellectual property rights by the Contractor."
  • Indemnity Scope Provision, with the types of losses covered, such as:
    • “Contractor shall indemnify Company against any third-party claims arising from Contractor's work."
    • “Tenant shall indemnify Landlord for any property damage claims caused by Tenant."
  • Indemnity Duty to Defend Provision: The indemnitor's duty to defend against claims, such as:
    • “Vendor shall defend and indemnify Client from intellectual property infringement claims related to the software."
  • Indemnity Exclusions Provision: Exceptions to the indemnification obligation, such as:
    • “The indemnity obligation shall not apply to any losses caused solely by Company's negligence."
  • Indemnity Assumption of Risk Provision: Transfers risk for certain losses to the indemnifying party, such as:
    • “Contractor assumes all risk for injuries to its personnel while performing work on Client premises."
  • a Contract Type-Specific Indemnity Provision, such as:
    • a Rental Agreement Indemnity Provision (within a rental agreement indemnity clause in a rental agreement), such as:
      • “Tenant agrees to indemnify and hold harmless Landlord from any claims arising out of Tenant's use of the property, except for damages caused by Landlord's negligence."
    • a Business Agreement Indemnity Provision (in a business contract), such as:
      • “Supplier agrees to indemnify Buyer from any losses resulting from defective products supplied under this contract."
    • a Software Licensing Agreement Indemnity Provision (within a software licensing agreement indemnity clause in a software licensing agreement contract), such as:
      • “Licensee shall indemnify Licensor against any claims that the licensed software infringes any third-party intellectual property rights."
  • ...
• Counter-Example(s):
  • Force Majeure Provision.
• See: Negligence, Hold Harmless Clause, Limitation of Liability Clause, Contract Law, Agency (Law).

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References

2020

• Righardt Allers. (2020). “Win the Game: Contract Playbooks. In: LinkedIn, June 8, 2020
  • QUOTE: ... Indemnities. Indemnity provisions place the risk of something going wrong on one party or other. These are usually among the most heavily negotiated part of a contract. For example, if you are providing software, you typically will indemnify the other side against third-party claims alleging IP infringement. ...

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