Insurance companies give nuclear indemnities; tech vendors should not
This is what I call a nuclear indemnity: “Vendor shall indemnify Customer against any third party claim arising out of or related to Vendor’s breach of this Agreement.” It’s nuclear because it destroys all in its path. It’s not limited to a type of claim, like IP, data breach, or personal injury. Tech vendors should […]
Don’t define “material breach”
Some contract drafters define material breach in their termination provisions. They find “material” too vague on its own. That’s a mistake because defining the concept can limit your rights in ways you’ll eventually find unacceptable. And “material breach” is not vague, believe it or not. A contracting party needs the right to terminate for the […]
Vendors, Don’t Accept Disputed Payment Terms
By David W. Tollen Many tech contracts include terms like the following: “If Customer disputes an invoice in good faith, it may withhold the amount in dispute but shall pay the balance on the date due.” That’s often followed by duties to negotiate in good faith and to keep performing during the dispute. It all […]