1. Indemnities in commercial contracts: your questions answered
Webinar – 8 February 2017

2. Presenters Rob Beardmore Senior Editor Sara Catley Director, In-House
Editorial
Natalie Salunke
European Counsel,
Enterprise Holdings
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.

3. What is an “indemnity”? No magic in the word “indemnity”
Key components:
a promise
to pay another business / group
for a loss suffered or an expense incurred
if a specified event occurs
Must define two elements:
trigger event
payment
Distinction from guarantees
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.

4. Question
When do you need an indemnity in a commercial contract and how do you approach negotiation?
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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5. Answer
When do you need an indemnity in a commercial contract and how do you approach negotiation?
All businesses different – no one size fits all
Risk management approach -> “easy to deal with”
Business model / industry practice
Key negotiation scenarios:
Indemnity for “breach of contract”. Does it add anything?
Negligent performance IP
Defective goods
TUPE, etc.
Consumer contracts – treat with caution
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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6. Answer
When do you need an indemnity in a commercial contract and how do you approach negotiation?
Approaching negotiation
Don’t get flustered - break it down
No “one size fits all”
Be aware of bargaining position
Challenge for the right reasons
Be careful what you wish for
Risk assess
Ask for help
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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7. Question
We always demand an indemnity when we want to have a remedy without the cost, time and uncertainty involved in proving a claim in damages. Does an indemnity really improve our position in the event of a claim?
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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8. Answer
Does an indemnity really improve our position in the event of a claim?
Remoteness and mitigation likely to still apply
Other common law hurdles: proof of loss, etc.
Risks of ambiguous / broad wording (see Wood v Sureterm Direct Ltd.)
Indemnified should have enforcement in mind
Indemnity a “roadmap to recovery” of defined loss
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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9. Question
How can I neutralise an indemnity, so I don’t have to pay out excessive claims?”
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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10. Answer
How can I neutralise an indemnity, so I don’t have to pay out excessive claims?”
If the counterparty refuses to remove, attempt to draft around the risks of a debt claim
Remoteness
Mitigation
Causation
Proof of loss
Assessment procedure in litigation / conduct
Limitation of liability
Restrict number of beneficiaries
Negligence-based and deal with contributory fault
“Reasonable” and “direct”
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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11. Question
I am getting bogged down with references to “indemnity”, “hold harmless” and “defend”. Please could you clarify the meanings and consequences of these?”
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12. Answer Indemnify, defend and hold harmless
If the counterparty refuses to remove, attempt to draft away or draft around the advantages identified in the previous question:
All interpretation depends on the clause, the contract and the context. No wording has a fixed meaning in all contexts.
Authority is scarce and sometimes contradictory
Garner’s Dictionary of Legal Usage (2011) proves indemnify = hold harmless
Say expressly what you mean to cover (and exclude anything else?)
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13. Question
As suppliers, we have to give a lot of indemnities and we need to limit the scope as far as possible. I am looking for ways to minimise exposure to risk. We sometimes carve out consequential losses or cap liability, but would this be unenforceable as going against the nature of the indemnity?
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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14. Answer Can you limit liability under an indemnity? Should you?
Yes – you can
Limit what you are indemnifying for
Limit who is indemnified
Limit the duration
Conduct of claims provisions
Financial limits
Sole and exclusive remedy?
Right to set off
Pricing
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.
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15. More Information See Practical Law practice notes:
– Contracts: indemnities
– Contracts: debt and damages, liquidated and unliquidated claims.
See Practical Law standard clause:
– Indemnity
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.

16. THANK YOU FOR ATTENDING
*Nothing in this webinar shall be taken to constitute legal advice.
None of the Editorial team providing responses to webinar questions are practising solicitors or barristers.