Today's contract tip is about a drafting technique used to deflect the focus off the number of indemnified parties.
Drafters can deemphasize who is included as indemnified parties by defining "Indemnified Parties" in the definition section instead of inline within the provision.
This technique takes advantage of our rush to review and how hard it is to track contract definitions out of context.
When I read a section and see a term is defined elsewhere, I either:
immediately find the definition, read for understanding, go back to the provision to see the context, and make any changes to the definition;
or
take a quick unconscious guess at what the definition says and keep reading, with the intent to look at it closely "later."
But the second path is a problem because "later" doesn't always happen. There are 100+ details to watch for in the simple contracts and 1,000+ in complex ones. When the list of indemnified parties is not included in the section itself, lawyers often overlook it during subsequent reviews.
My advice? When you read indemnification for the first time, either review it in-depth at that moment or add a note to check the indemnified party later.
Be careful that you don't skim through and then forget about it.
What's your approach to defined terms in your indemnification provision?
