The Risky Business of Drafting Indemnification Provisions

Parties to private acquisition transactions will shift and allocate risks by including (1) limitations such as caps and deductibles on seller indemnification obligations, (2) negotiated procedures regarding the control over the defense of third-party claims, and (3) a heavily negotiated definition of “losses” with carefully drafted exclusions. Market trends and bargaining power affect the negotiation of indemnification obligations. Compare buyer and seller preferences and related drafting considerations in this Practical Guidance indemnification provisions chart.     

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Related Content

• Indemnification Provisions in Private Acquisition Agreements
  Explore indemnification provisions in detail before drafting the next private acquisition agreement.

• Indemnification Clause (Deductible)
  Use this indemnification clause to incorporate a deductible into your next draft.

• Indemnification Clause (Tipping Basket)
  Draft your next indemnification clause to incorporate a tipping basket.

• Indemnification Clause (Combination Basket)
  Take a look at this indemnification clause drafted to include a combination basket.

• Agreement and Plan of Merger (Private Target) (Pro-Buyer) (DE)
  Refer to the indemnification provisions and drafting notes for guidance negotiating indemnification provisions.

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