The Overuse of Indemnities
This week’s musings on tech contracts… Many American IT contracts feature a strange clause. One party (usually the customer) asks the other for an indemnity against, “any third party claim resulting from SuspectCo’s breach of this Agreement,” or words to that effect. That indemnity doesn’t just cover claims about data incidents or personal injury or […]
Don’t grant a fault-based indemnity
I think it’s a mistake to indemnify against claims resulting from indemnitor negligence or other wrongdoing. Indemnities against 3rd party claims usually specify the claims in question. They list IP claims, subcontractor compensation claims, or whatever. It doesn’t matter whether the indemnitor did something wrong under the typical clause. The vendor doesn’t just defend IP […]