Indiana Business Law Blog
Three of our recent articles addressed allocating risk with business contracts. In this one, we expand on our earlier articles by focusing on techniques experienced business attorneys use to write better indemnification clauses.
Use Defined Terms to Improve Readability
Let’s start with the following clause setting out the basic indemnification rights and duties in a contract for the sale and purchase of equipment. It consists of one sentence, long and difficult to follow, but typical as indemnification clauses go.
In our last article, we explored key risk allocation clauses business attorneys use in contracts, including indemnification, liability caps, waiver of consequential damages, and termination provisions. These foundational concepts highlight the importance of clear drafting and strategic negotiation in managing contractual liabilities. This article delves deeper into advanced considerations, offering practical guidance for tailoring clauses to industry-specific needs, coordinating provisions with insurance coverage, and understanding the interplay between liability caps and indemnification. As in the previous article, we focus on Indiana law. Although the details mary vary from state to state, the same concepts apply to most U.S. jurisdictions.