Indemnity agreements are central to the risk allocation and limitation of liability system built into most transactional arrangements.
The indemnitor agrees to indemnify the indemnitee on the occurrence of certain events. The scope of liability in these agreements is very carefully defined, often including actual costs but excluding consequential damages or any damages arising from third-party claims. All of the pieces of the indemnity puzzle – scope, measure of damages, exclusions and procedures for cost recovery – must be very carefully considered, negotiated and drafted.
This program provides a practical guide to drafting key provisions of indemnity agreements in transactional agreements.
- Scope of indemnity – indemnity v. hold harmless, damages v. liabilities, direct v. third-party claims
- Types of losses subject to indemnity – breaches of reps and warranties, covenants, losses, specific circumstances
- Determining recoverable damages and costs, including attorneys’ fees
- Implied or equitable indemnity – and use of disclaimers to limit liability
- Difference between the duty to defend v. indemnification
- Procedure for claiming and obtaining indemnification reimbursements