Introduction:

Indemnity clauses are an important aspect of commercial contracts that protect parties involved. In commercial contracts, indemnity clauses allocate the risk of certain losses and liabilities between the parties involved. Understanding indemnity clauses and their applications is crucial for business owners and managers.

In this article, we will take a closer look at sample indemnity clauses used in commercial contracts.

Sample Indemnity Clauses:

1. General Indemnification: This clause encompasses all liabilities that may arise from a product, service, or work provided by one party. The indemnifying party agrees to defend, indemnify and hold harmless the indemnified party from and against any and all claims, damages, losses, expenses, or liabilities.

Example: “ABC Corporation hereby agrees to indemnify, defend, and hold harmless XYZ Corporation from and against any and all claims, damages, losses, expenses, or liabilities arising from the products and services provided by ABC Corporation.”

2. Third-Party Indemnification: This clause pertains to liabilities that arise from actions of a third party. The indemnifying party agrees to take responsibility for the third party`s action and compensate the indemnified party for any loss or damage incurred.

Example: “ABC Corporation shall indemnify and hold harmless XYZ Corporation against any and all losses, damages, claims, liabilities, and expenses (including reasonable attorneys` fees) arising out of any third-party claims related to the services provided by ABC Corporation.”

3. Intellectual Property Indemnification: This clause pertains to intellectual property infringement claims. The indemnifying party agrees to defend and indemnify the indemnified party from any third-party claims of intellectual property infringement.

Example: “ABC Corporation shall defend and indemnify XYZ Corporation against any and all claims, demands, and actions arising from any alleged infringement of intellectual property rights by the products or services provided by ABC Corporation.”

4. Limitation of Liability: This clause limits the amount of liability for damages or losses that the indemnifying party agrees to bear. The clause sets a maximum amount of damages the indemnified party can recover from the indemnifying party.

Example: “ABC Corporation’s total liability for any and all claims, damages, losses, expenses or liabilities arising from the products and services provided by ABC Corporation, whether in contract, tort or otherwise, shall not exceed the total amount paid by XYZ Corporation to ABC Corporation under this agreement.”

Conclusion:

Indemnity clauses are critical in commercial contracts as they protect the parties involved from potential losses and liabilities. A well-written indemnity clause can save businesses from costly litigation and provide peace of mind. It is essential to consult with legal experts while drafting and negotiating indemnity clauses to ensure that they protect your interests adequately.