Should indemnity clauses be mutual?

Mutual indemnification provisions are meant to provide both parties with a sense of security. In other words, no matter which party breached the contract, the breaching/indemnifying party would foot the legal bills.

How do you write a mutual indemnification clause?

Each party hereto shall and does hereby indemnify and save harmless the other, as well as the other’s directors, officers, employees, servants, agents, contractors and shareholders, from and against any and all claims, demands, actions, suits, proceedings, liabilities, losses, damages, costs, expenses, fees, fines.

What is infringement indemnity?

Licensor indemnifies, defends, and holds Licensee harmless from and against any claims, actions, or demands alleging that the Software infringes any United States patent, United States copyright, or other United States intellectual property right of a third party.

What is a vendor indemnification agreement?

Vendor agrees to indemnify and hold the Purchaser harmless against all liability claims or demands for injuries or damages including but not limited to attorney’s fees to any person or property arising out of the performance of the purchase order by Vendor. …

Why mutual indemnification is important?

The primary benefit of an indemnification provision is to protect the indemnified party against losses from third party claims related to the contract. Indemnification provisions are generally heavily negotiated (and often heavily litigated) clauses.

Is indemnification only for third party claims?

Indemnification is only for Third Party Claims Unless Clause Expressly States it applies to First Party Damages. An indemnification clause will only apply to liability for claims brought by third parties. It will not apply to claims between the contracting parties.

What is the purpose of a mutual indemnification clause?

In a mutual indemnification, both parties agree to compensate the other party for losses arising out of the agreement to the extent those losses are caused by the indemnifying party’s breach of the contract.

Do you need an indemnity clause?

Indemnity clauses, also known as indemnification clauses, require one party to reimburse the other for recoverable damages from third-party claims. The indemnifying party is demanding payment. The indemnified party is required to pay.

Why would a buyer indemnify a seller?

Sellers will usually look for buyers to indemnify them from losses arising from any breach of the representations, warranties, covenants or agreements made by the buyer at the time of the transaction. The seller would then potentially act on the buyer indemnity provided to protect him/herself from the resulting loss.

What should a vendor agreement include?

What To Include In Your Vendor Agreement

• 1) Scope Of The Services Or Products.
• 2) Contract Length And Duration.
• 3) Price And How It Will Be Paid.
• 4) How To Get Out Of The Contract.
• 5) What Happens If Someone Doesn’t Follow The Vendor Agreement.

Should SaaS indemnity provisions be the same for customers and providers?

But since the risks that a SaaS services provider brings to the relationship are often very different than those of its customer, there is no good reason that their respective indemnity provisions should be identical. Again, the focus is on the unique risks to one party from the other.

What should an indemnity provision in a contract cover?

A surprising number of indemnity provisions in all types of contracts do not limit the scope of the indemnification to claims brought by third parties – which is all an indemnity provision should cover. An indemnity provision exists to lessen or eliminate the risk from third party claims, not the risk that one party will breach the agreement.

Can an indemnification provision include an attorney’s fees provision?

Such language in effect turns an indemnification provision into a back-door way to include an attorney’s fees provision, and possibly provides extra causes of action in a breach lawsuit. Avoid that always. 2. Risks are Different, so Indemnity Provisions can be Different

What are the limitations on the scope of an indemnification agreement?

These limitations on the scope of the indemnification fit the realities that the agreement cannot continue in effect without the IP, and that the SaaS provider only has certain options to deliver a non-infringing service.