Contract Clause Library
Indemnification clause
Requires one party to cover the other's losses, legal costs, or damages arising from specific listed causes.
Indemnification shifts financial responsibility for certain kinds of harm — a third-party lawsuit over intellectual property infringement, a data breach caused by negligence — onto whichever party is better positioned to have prevented it. It's one of the higher-stakes clauses in a contract because, unlike a liability cap, it can require covering someone else's legal costs and damages, not just your own losses.
Sample wording
Sample language (illustrative, not legal advice)
Vendor will indemnify and hold Client harmless from third-party claims arising from Vendor's gross negligence, willful misconduct, or infringement of a third party's intellectual property rights in the delivered work, excluding any claim arising from Client-supplied materials.
Red flags
- Indemnification obligations that are one-sided when the underlying risk is genuinely shared
- No carve-out excluding claims caused by materials or instructions the client itself supplied
- Indemnification scope broad enough to cover ordinary business disputes rather than specific, listed triggering events
How MarginFlow reads it
This clause isn't part of MarginFlow's day-to-day scope-tracking logic — it's extracted and surfaced for reference so it's easy to find quickly, since indemnification questions tend to come up suddenly and need the exact carve-out language, not a summary.
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