Understanding Indemnity Statements: Examples and Best Practices

Indemnity statements, also known as indemnification clauses, play a crucial role in contracts by shifting risks and potential costs from one party to another. In this comprehensive guide, we will delve into the world of indemnity statements, providing you with examples and best practices to ensure you understand their use and enforceability.

What is an Indemnity Statement?

An indemnity statement is a contractual provision that outlines the responsibilities and liabilities of the parties involved in a contract. It typically states that one party (the indemnitor) agrees to compensate or protect the other party (the indemnitee) from any losses, damages, or expenses that may arise from specified events or situations.

Are Indemnity Statements Enforceable?

The enforceability of indemnity statements can vary depending on the jurisdiction and the specific language used in the contract. However, courts generally uphold these clauses as long as they are clear, specific, and not contrary to public policy or unconscionable.

Sample Indemnity Statement

Here is a sample indemnity statement that can provide you with a better understanding of how these clauses are typically structured:

'The Company shall indemnify, defend, and hold harmless the Ramot Indemnitees against any liability, damage, loss, or expense incurred by or imposed upon any of the Ramot Indemnitees in connection with any third party claims, suits, actions, demands, or judgments resulting from or arising out of the practice or use of any of the Ramot Technology or Joint Technology by the Company.'

This sample clause illustrates the indemnitor's obligation to protect the indemnitee from any claims or liabilities arising from the use of specified technology.

Best Practices for Drafting Indemnity Statements

When drafting an indemnity statement, it is important to consider the following best practices:

• Clearly define the scope of indemnity: Specify the events or situations for which the indemnitor will be responsible for compensating the indemnitee.
• Use clear and precise language: Ensure that the language used in the indemnity statement is unambiguous and easily understood.
• Consider the limits of indemnity: Determine any limitations on the indemnitor's liability, such as monetary caps or exclusions for certain types of losses.
• Review applicable laws and regulations: Familiarize yourself with the laws and regulations governing indemnity statements in your jurisdiction to ensure compliance.

Additional Resources

If you are interested in learning more about indemnification clauses and want to streamline the contract drafting process, we recommend checking out Bloomberg Law. Their platform offers a range of tools and resources to help you draft contracts faster and with greater efficiency.