Indemnity is usually one of the most heavily negotiated provisions in enterprise software and SaaS agreements. As a vendor, how should you decide when and how to indemnify your customers? As a customer, what should you ask for and expect from the vendor?
- What is Indemnity? We explore the common law and California statutory background for indemnity and discuss the unique way it interconnects with other contractual provisions.
- When is Indemnity Appropriate? We identify Four Fundamental Principles to help you decide when indemnity may be appropriate in a software or SaaS agreement. We then apply the Four Fundamental Principles to a number of common customer requests for indemnity: intellectual property infringement, breach of contract, negligence and willful misconduct, and data security breach.
- How to Indemnify? We provide seven tips for drafting key elements of an indemnity clause. We then review the important interplay between the indemnity clause and the limitation of liability and provide drafting and negotiation tips for both the vendor and customer.
- Questions from the Roundtable – We share questions and answers from our first Roundtables for this Episode. The discussion includes indemnification for different types of intellectual property, how to respond to a request to indemnify for violations of law, additional drafting tips, a further look at exclusions from the consequential damages waiver and a walkthrough of the indemnity checklists provided in the Tool for this Episode.