12 Days of Contracts – Day 10 – Indemnification

Photo by The Entertainment Esquire

On the 10th day of Christmas, my client gave to me, 10 Year reversion… (Mel’s Remix)

In honor of the holidays, I’d like to share a few tips with you to make sure you go into the new year with new knowledge. Instead of the 12 Days of Christmas, I present to you — The 12 Days of Contracts! Yes, I’m a legal nerd!

In these 12 days, I will share some contract basics, terminology, and other info so you can be more informed on what a proper contract needs to contain to make it valid and enforceable.

Prior 12 Days Posts:

IF YOU MISSED IT, SEE DAY 9 (TERMINATION) HERE | IF YOU MISSED IT, SEE DAY 8 (DELIVERY) HERE | IF YOU MISSED IT, SEE DAY 7 (SCOPE) HERE | IF YOU MISSED IT, SEE DAY 6 (RIGHTS) HERE | IF YOU MISSED IT, SEE DAY 5 (FEES) HERE | IF YOU MISSED IT, SEE DAY 4 (TERRITORY) HERE | IF YOU MISSED IT, SEE DAY 3 (TERM) HERE | IF YOU MISSED IT, SEE DAY 2 (ELEMENTS) HERE | IF YOU MISSED IT, SEE DAY 1 (PARTIES) HERE

Indemnification is not just fancy legal jargon! It has real-world consequences for parties to a contract so it’s important to understand and include for protection of the parties.

Melanie Rodriguez aka The Entertainment Esquire

Indemnification

This sounds like fancy legal jargon. It is, not going to lie to you. It’s considered the boilerplate language stuck at the end of a contract that nobody ever reads. It’s standard to include in any contract. However, you should still read it and have a decent understanding! And yes, this should be in every contract.

If any of the representations and warranties made by a party (to be discussed in Day 11) is violated (called a “breach” as discussed in Day 9), indemnification provides the mechanism to fix the breach. Indemnification is simply a long word for protecting against loss. It is promising one party’s obligation to protect the other party against losses or damages from a third party.

For example, in the case of a licensor (person granting license) and licensee (person receiving license), if the licensor is ever sued because of the actions of the licensee, indemnification would mean that the licensee will defend and hold licensor harmless.

As we discussed in some previous concepts, indemnification can be one sided or unilateral, meaning only given to one party. If indemnification is required by all parties, then it is mutual.

Even though some clauses in a contract, like indemnification, are considered to be boilerplate and standard in every contract, they are no less important. These boilerplate terms make a big difference, especially if the deal goes south. Most people don’t understand, and frankly, ignore. Don’t be most people! If you have any questions about your contracts or drafting contracts, reach out and I can clear up any confusion.

Most people don’t understand, and frankly, ignore. Don’t be most people!

Questions to ask:

  • 1) Is indemnification included in the contract?
  • 2) What party is indemnifying the other? Is it one sided or mutual?
  • 3) Does indemnification cover attorney’s fees?
  • 4) Do the parties carry insurance to cover any injuries, errors, malpractice? Insurance usually comes into play when it comes to disputes under contracts, if there is an insurance policy to cover.

If you have any questions related to a contract you signed or need guidance for constructing your contracts, please contact me.

Photo by Anna-Louise on Pexels.com

*Disclaimer: This post is for informational purposes only and does not constitute legal advice. An attorney client relationship is not formed until there is a signed fee agreement*

Published by theentertainmentesquire

Entertainment attorney based in Los Angeles, California. I provide transactional legal representation and services to artists, creative entrepreneurs, and industry professionals in the music and entertainment industry.

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