This contract tip is about an indemnifying party's priorities for the process in an indemnification provision.
This part of the provision outlines how the parties will allocate responsibility for defending against covered claims. If you are the indemnifying party, you'll want to make sure your indemnification provision covers these critical concepts:
1. Control - Most indemnifying parties want to control the case. After all, they are the ones paying for it, as well as any judgment or settlement. The party that is being indemnified does not have the same incentives to manage costs and protect the indemnifying party's interests. This control is especially important when there are intellectual property rights at stake.
2. Cooperation - Indemnifying parties want to ensure that the person or entity that was sued cooperates. That person or entity knows the facts and circumstances leading to the claim. They also have all the documentation and records. Today's contract tip is about an indemnifying party's priorities for the process in an indemnification provision.
This part of the provision outlines how the parties will allocate responsibility for defending against covered claims. If you are the indemnifying party, you'll want to make sure your indemnification provision covers these critical concepts:
1. Control - Most indemnifying parties want to control the case. After all, they are the ones paying for it, as well as any judgment or settlement. The party that is being indemnified does not have the same incentives to manage costs and protect the indemnifying party's interests. This control is especially important when there are intellectual property rights at stake.
2. Cooperation - Indemnifying parties want to ensure that the person or entity that was sued cooperates. That person or entity knows the facts and circumstances leading to the claim. They also have all the documentation and records.
3. Settlement rights - Indemnifying parties also want to make sure that they have the right right to settle the claim. Few cases make it all the way to a final unappealable ruling.
Are these your top 3 priorities with these provisions? What others would you add?
