Key Indemnification Provisions in Business Agreements

Understand the differing ways that indemnification terms are critically important in allocating risks in mergers and other business sale transactions. Representations and warranties provide the foundation for parties agreeing to enter a business sale transaction. Indemnification provisions provide the allocation of risk and framework for resolution when those representations and warranties are determined to be untrue and covenants the parties made are breached.

Explore how indemnification provisions are drafted for different business scenarios, including properly allocating risk and addressing unique regulatory requirements and other sources of liability beyond a breach of a representation and warranty. Learn about fundamental, special, and general representations; caps on liability, baskets, and buckets; the types of damages recoverable; how to address third party claims; time limitations to bring claims; use of a stockholders’ representative; methods of dispute resolution; and resources available for lawyers drafting indemnification provisions.