8
PLAYBOOK TEMPLATES
Subcontracting Agreement
A Subcontracting Agreement defines obligations between a primary contractor and subcontractor for project execution. This playbook examines flow-down provisions, performance guarantees, and dispute management.
Indemnification and Liability
Negotiation strategy
Ensure mutual indemnification to cover third-party claims and limit liability to direct damages. Verify that insurance coverage is adequate and certificates are provided.
Negotiate for a cap on liabilities that aligns with the financial exposure limits. Ensure exclusions for gross negligence and confidentiality breaches are included.
Essential elements
1
Indemnification Clause
Mutual coverage for third-party claims.
2
Limitation of Liability
Limits liability to direct damages.
3
Insurance Coverage
Requires adequate insurance coverage.
Action framework
ACCEPT
Propose edits if indemnification is not mutual or liability is uncapped.
EDIT
Reject clauses that expose to unlimited liability or lack insurance requirements.
ADD
Add clauses for mutual indemnification and liability caps if missing.
PRO TIP
Always verify that insurance certificates are up-to-date and reflect the agreed coverage.
Real-world examples
FAVORABLE
Balanced Indemnification
"Each party shall indemnify, defend, and hold harmless the other party from third-party claims arising from negligence."
NEUTRAL
Standard Liability Limitation
"Liability is limited to direct damages, excluding gross negligence."
UNFAVORABLE
Unlimited Liability Exposure
"No cap on liabilities, exposing parties to unlimited damages."
Alternative scenarios & positions
High-Risk Projects
In high-risk projects, ensure that indemnification covers all potential liabilities and that insurance coverage is increased.
International Agreements
For international agreements, consider jurisdiction-specific indemnification and liability laws to ensure compliance.
Small Business Contracts
In contracts with small businesses, negotiate lower liability caps to align with their financial capabilities.
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WEEK 3
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WEEK 4
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