An SLA establishes measurable service performance standards between provider and customer. This playbook explains methods to draft enforceable metrics, remedies for non-performance, and escalation procedures.
Why This Matters: Inadequate indemnity terms expose parties to significant legal costs and judgments. Detailed provisions reduce ambiguity and speed up defense and recovery.
Negotiation strategy
If you're the Company:
Ensure the indemnification clause covers all potential liabilities, including IP infringement and data breaches. Negotiate for reciprocal indemnities to protect against third-party claims.
If you're the Contractor:
Limit the scope of indemnity to direct damages and reasonable costs. Seek to include caps on liability and ensure clear procedures for notification and defense control.
Essential elements
1
Indemnity Triggers
Events activating indemnity obligations.
2
Scope of Indemnity
Extent of coverage and liabilities.
3
Indemnification Procedures
Steps for claim notification and defense.
Action framework
ACCEPT
Propose edits if the clause lacks clarity on triggers or scope.
EDIT
Reject if the clause imposes unlimited liability without reciprocal terms.
ADD
Add language for specific risks like IP infringement or data breaches.
PRO TIP
Always ensure indemnity clauses include clear procedures and reciprocal terms to protect both parties.
Example clauses
FAVORABLE
Comprehensive Indemnification Clause
"Each party agrees to indemnify, defend, and hold harmless the other party from claims, liabilities, losses, damages, costs, and expenses arising from IP infringement, data breaches, and other liabilities."
NEUTRAL
Basic Indemnification Clause
"The Indemnifying Party shall indemnify the Indemnified Party against third-party claims as specified herein."
UNFAVORABLE
One-Sided Indemnification
"The Contractor shall indemnify the Company for all claims without limitation or reciprocal terms."
Fallbacks
High-Risk Projects
In high-risk projects, ensure indemnity covers all potential liabilities, including unforeseen risks, with higher caps on liability.
Cross-Border Transactions
Consider jurisdictional differences in indemnity enforcement and include specific language to address cross-border legal challenges.
Data-Intensive Agreements
For data-intensive agreements, emphasize indemnity for data breaches and compliance with privacy laws like GDPR.
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DocJuris is not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options,selection of forms or strategies.