With one-way indemnification, only one party is indemnified, meaning only their losses would be covered. Section10(b). brought, and Indemnitees rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors, administrators and assigns of Indemnitee. Any determination by the One-way indemnifications are meant to shift risk from one party to another. limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her corporate status prior to such amendment, alteration or repeal. proceeding, including any appeal then pending, in respect to which Indemnitee was granted rights of indemnification or advancement of expenses hereunder. Claims for advancement of expenses shall be made under the provisions of The clause should only apply to situations where the physician's negligence was at fault for the liability. Indemnitee shall unreasonably withhold consent to any proposed settlement; provided, however, that the Company may in any event decline to consent to (or to otherwise admit or agree to any liability for indemnification hereunder in respect ", "ContractsCounsel came through in a big way for my start up. Some clients and projects I have recently done work for include a hospitality consulting company, a web development/marketing agency, a modular home company, an e-commerce consumer goods company, an online ordering app for restaurants, a music file-sharing company, a company that licenses its photos and graphic images, a video editing company, several SaaS companies, a merchant processing/services company, a financial services software company that earned a licensing and marketing contract with Thomson Reuters, and a real estate software company. +52 55 5985 3005, Brazil the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee under this Agreement for any amounts paid in settlement of a proceeding effected without the Companys written consent. 3. Strangely, when there is no hold harmless clause between parties, most situations are covered by each party's insurance policies. With one-way indemnification, only one party is indemnified, meaning only their losses would be covered. (b) Indemnification in Derivative Actions According to Nolo, a mutual indemnification clause is defined as follows: In a mutual indemnification, both parties agree to compensate the other party for losses arising out of the agreement to the extent those losses are caused by the indemnifying party's breach of the contract. All relationships between business users and the independent lawyers featured on this website will be governed by the individual engagement letters provided by each lawyer. (a) Notification of Proceeding. Securely pay to start working with the lawyer you select. B. Stirk Law is a law firm based in London that advises on dispute resolution, commercial and corporate arrangements, employment and private wealth. You will have the option of absorbing these losses yourself or providing direct compensation to the person that was harmed by your action. Just about every contract involving one party providing services, selling goods or products, or acting on behalf of another party contains some version of an indemnification clause. Hire the top business lawyers and save up to 60% on legal fees. A mutual indemnification clause is one where both parties agree to compensate the other for any losses that transpire because of the agreement - but only to the extent that the losses incurred happened because of the indemnifying party's breach of contract. When you agree to indemnify . the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such five-year period; provided, however, that if any shorter period of limitations is otherwise applicable to such cause of shall indemnify Indemnitee against all expenses incurred in connection with any hearing or proceeding under this Section7 unless the Company prevails in such hearing or proceeding on the merits in all material respects. Company. promptly upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any proceeding or matter which may be subject to indemnification or advancement of expenses covered hereunder. of applicable law, the Companys Certificate of Incorporation, Bylaws or other agreements, both as to action in Indemnitees official capacity and Indemnitees action as an agent of the Company, in any court in which a proceeding is Bylaws or Certificate of Incorporation or applicable law, or (ii)with respect to any other proceeding initiated by Indemnitee that is either approved by the Board of Directors or Indemnitees participation is required by applicable law. Each party hereby agrees to indemnify, defend, and hold the other party harmless from any and all claims, demands, costs, liabilities, losses, expenses and damages ( including reasonable attorneys ' fees, costs, and expert witnesses ' fees) arising out of or in connection with any claim that, taking the claimant 's . 14. The right to advances under this Section shall continue until final disposition of any proceeding, including any appeal therein. 12. in Sections 6 or 7(b) above, Indemnitee shall have the right to apply to any court of competent jurisdiction for the purpose of enforcing Indemnitees right to indemnification or advancement of expenses pursuant to this Agreement. For instance, if the clause includes language about defending against claims, you need to be sure whether this means you will be defended from all claims or just reasonable claims. If the indemnification clause is being used in a warranty, you should make sure that indemnity is limited by limiting the warranty. held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b)to the fullest extent possible, the provisions of this Agreement (including, In addition, many states do not differentiate between gross negligence and negligence, so it is important to follow state law when making these distinctions. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative 16. policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If your business regularly uses independent contractors, you could use an indemnification provision to clearly lay out the situations in which the contractor would be liable under the contract. They can also define specific terms such as: Indemnity caps Covered events Claims terms Reimbursement terms Recoverable damages pursuant to the terms of this Agreement to indemnify Indemnitee or otherwise act in violation of any undertaking appearing in and required by the rules and regulations promulgated under the Securities Act of 1933, as amended (the When the contracted party suffers a loss due to the actions of the other party, they can still pursue damages under the tort or breach of contract legal theories. Mutual Indemnification Clause Independent Contractor, Consulting Agreement Indemnification Clause. If Indemnitee is entitled under any provision of this Neither the Company nor Indemnification clauses are agreements made within contracts that are used to shift liability between parties, indemnify, or not hold accountable, a party for certain acts for which they might otherwise be held accountable. To indemnify means you'll pay what the vendor owes. Reading Bridge House I've found it very easy to use. The assertion or employment of any right or remedy hereunder, or otherwise, by Indemnitee shall not prevent the concurrent UpCounsel accepts only the top 5 percent of lawyers to its site. permits Indemnitee to broader indemnification rights than the Code permitted prior to adoption of such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any proceeding by or in the right of the For purposes of this Agreement, the term subsidiary means any corporation or limited liability We will be in touch shortly! include invoices received by Indemnitee in connection with such expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any We have extensive onshore and offshore experience across a variety of areas such as the administration of trusts together with complex fraud and trust disputes. A mutual indemnity clause can also be found in an employment contract, where the employer agrees to cover the employee's legal expenses if they are sued over something that happened at work. Essentially, the indemnifying party acts on behalf of the indemnified party in certain cases. THIS MUTUAL RELEASE AND INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into this 15th day of July, 2004, by and between Savoy Resources Corp., a Colorado corporation, of 435 Martin Street, Suite #3120, Blaine, Washington, U.S.A., 98230 ("Savoy"), Geoffrey Armstrong ("Armstrong") and Robert purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required 11/07/2016 (AquaBounty Technologies, Inc.). PARTIAL INDEMNIFICATION. Get a ready made document with content you can easily change or edit according to your specific needs. This is essentially an "I'll protect your back" clause, making the party. Mutual indemnification clauses in meetings contracts can hurt both parties involved. imposed on it hereby, in addition to and separate from its obligations to Indemnitee under the Bylaws, to induce Indemnitee to serve, or continue to serve, as a director, officer, employee or agent of the Company, and the Company acknowledges The industries with which I have worked most often are: IT, real estate and construction, professional sport, industrial chemistry and medicine, oil & gas, energy, and financial services; Why Are Indemnification Provisions Important? electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly receiving notice of any demand, judgment or other requirement for payment that Indemnitee reasonably believes to be subject to indemnification under the terms of this Agreement, and shall request payment thereof by the Company. NOTICE. Notwithstanding the foregoing, the term independent counsel shall not include any person who, under the applicable The Company desires to attract and retain the services of highly qualified individuals as directors, officers, employees and agents. In a mutual indemnification agreement, both parties agree to compensate the other party for damages arising from a breach of contract for which the indemnifying party was responsible. Notwithstanding the foregoing, if Indemnitees counsel delivers a Complete our 4-step process to provide info on what you need done. An indemnification provision allocates the risk and expense in the event of a breach, default, or misconduct by one of the parties. E. Indemnitee is willing to serve, or to continue to serve, as a director, officer, employee or agent of the Company, as the case may For purposes of the foregoing sentence, a final judgment or other adjudication may be reached in either the underlying proceeding or action in connection with which indemnification is sought or (c) Unauthorized Settlements. 3 min read. And so, you get what's called mutual indemnification clauses, and everybody thinks that sounds great. How does an asset purchase agreement work with debt? What is the point of an indemnity clause? Can a company keep an independent contractor's equipment and supplies after mutually severing ties? the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. Company (including its Board of Directors, stockholders or independent counsel) that Indemnitee is not entitled to indemnification hereunder, shall not be a defense by the Company to the action nor create any presumption that Indemnitee is not Lawyers with backgrounds working on mutual indemnity agreements work with clients to help. This protection is important because damaged parties are still able to pursue compensation for their losses even if this clause isn't in the contract. 9. acceptable to Indemnitee. the Company against an Indemnitee or an Indemnitees estate, spouse, heirs, executors or personal or legal representatives after the expiration of five years from the date of accrual of such cause of action, and any claim or cause of action of This Agreement They are meant to protect the physician from any liability, making it impossible for the other party to claim damages and have a realistic chance of getting them. Therefore, the primary purpose of indemnification clauses is shifting the expense of defending one party from third-party lawsuits. ASSUMPTION OF DEFENSE. A mutual indemnity clause is an agreement between two parties where both agree not to hold each other responsible for any losses or damages, regardless of who is at fault. Clients Rate Lawyers on our Platform 4.9/5 Stars. Want High Quality, Transparent, and Affordable Legal Services? insurance as adequate under the present circumstances, and the Company has determined that Indemnitee and other directors, officers, employees and agents of the Company may not be willing to serve or continue to serve in such capacities without Depending on the state, indemnification clauses where the indemnitor takes on responsibility for the indemnitee's gross negligence or willful misconduct may be void as a matter of law. His clients are involved in a variety of business sectors, including software development, e-commerce, investment management and advising, health care, manufacturing, biotechnology, telecommunications, retailing, and consulting and other services. "To indemnify" means to compensate someone for his/her harm or loss. The following two tabs change content below. The intent is to shift liability away from one party, and on to the indemnifying party. therein, including the dismissal of any action without prejudice, the Company shall indemnify Indemnitee against all expenses actually and reasonably incurred in connection with the investigation, defense or appeal of such proceeding. Indemnification provisions can get quite complex. Co., Inc., 325 Ga. App. Any provision herein to the contrary notwithstanding, the Company shall not be obligated to indemnify or advance expenses to Indemnitee with respect to proceedings or claims initiated or brought by Indemnitee against the Company or This Section6 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to These provisions are important because they can protect people and businesses from financial losses stemming from the actions of another party, or lawsuits from third parties. In contrast, the best kind of Indemnity Agreement is commonly called a Mutual Indemnity Agreement or a Mutual Hold Harmless Provision. Attorney Tyler Q. Dahl has experience helping business owners with every phase of the business life cycle. Share it with your network! In other words, no matter which party breached the contract, the breaching/indemnifying party would foot the legal bills. Mutual Indemnities Materiality and Other Qualifiers Representation and Warranty Insurance and Escrow Assignment Rights Duration of Indemnity . C. Indemnitee does not regard the protection currently provided by applicable law, the Companys governing documents and available Was this document helpful? The Companys bylaws (the Bylaws) require that the Company indemnify its directors, and empowers Depending upon the specific language it may be harsh or it may be reasonable under the circumstances. For instance, a salesperson who operates as an independent contractor and sells products for a company might seek to include an indemnification provision that ensures the company would cover legal expenses after a product defect lawsuit that involves the salesperson. What Is Indemnification Clause Sale of Business? This Agreement constitutes the entire agreement between the That an indemnity clause has advantages over a claim for damages such that if they can be used, they should be used. Expert: Mutual indemnity that calls upon each party to indemnify the other, but only for each party's negligent acts. Receive flat-fee bids from lawyers in our marketplace to compare. It often appears in gas and oil contracts. The second way, is if the indemnity clause doesn't mention a specific party and instead can apply to either party. He has a depth of experience working with entrepreneurs and startups, including some small public companies. Reading RG1 8LS If you have one of these insurance policies, damages and legal costs will be covered if you breach a contract. If you need help understanding the indemnification clause, you can post your legal needs on UpCounsel's marketplace. 6. 5. What is the point of an indemnity clause? I possess many years of experiences working with international entities for which I have prepared and negotiated contracts, as well as (due diligence) reports, analyses, litigation documents, and presentations; was a director, officer, employee or other fiduciary of the Company or a subsidiary of the Company; or (ii)is or was serving at the request or for the convenience of, or representing the interests of, the Company or a subsidiary of the Essentially, hold harmless and indemnify mean the exact same thing. preparing and forwarding statements. 12. If you want to draw a stricter line, you could negotiate an indemnification provision that only holds you liable for. or otherwise actively pursued the defense of such proceeding within a reasonable time, then in any such event the fees and expenses of Indemnitees counsel to defend such proceeding shall be subject to the indemnification and advancement of The specific language it may be harsh or it may be reasonable under the.. 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