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  1. #1
    Join Date
    May 2013
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    Default What Does an Indemnification Clause Do

    Could someone please explain in simple terms what points 8 and 9 mean on this page?
    http://www.waltercounsel.com/Domain_Name_Purchase.html


    Cut and Paste:
    8. Seller will indemnify, defend and hold harmless Buyer, its officers, directors, shareholders, employees, agents, affiliated entities, successors and assigns, from any and all damages, claims and other liabilities, including without limitation reasonable and actual attorneys' fees and costs, whether or not a lawsuit or other proceeding is filed, that in any way relates to (a) any claims or other actions by any third party arising out of the ownership of the domain name prior to the transfer to Buyer and (b) Seller's breach of any provision of this Agreement.


    9. Buyer will indemnify, defend and hold harmless Seller, its officers, directors, shareholders, employees, agents, affiliated entities, successors and assigns, from any and all damages, claims and other liabilities, including without limitation reasonable and actual attorneys' fees and costs, whether or not a lawsuit or other proceeding is filed, that in any way relates to (a) any claims or other actions by any third party arising out of the ownership of the Domain after the transfer to Buyer and (b) Buyer's breach of any provision of this Agreement.

  2. #2
    Join Date
    Jan 2006
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    38,867

    Default Re: Indemnity

    not sure what you want explained. They are both quite clear in their statements.

    Was their something specific within each clause (each being a mirror of the other than each clause specific to either the buyer or seller) that was not clear?

  3. #3
    Join Date
    May 2013
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    Default Re: Indemnity

    Thanks for the reply, jk.

    Does the mirror thing mean that both the buyer and seller walk away after completing the deal and are not liable to each other for any claims arising from any third party?
    In that case, what happens if a third party does file a claim against either party above?

  4. #4
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    Jan 2006
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    Default Re: Indemnity

    ok, I see what you want now.


    to indemnify means you will defend the party or pay a claim against the party you have agreed to indemnify should a claim arise out of the situation involved.

    as an example;

    your car insurance company will indemnify you against claims made when you cause an accident. Obviously they have the policy limits so they will not indemnify you against ALL claims but those that fall within the rules and limits of your policy.


    In your situation, each party is agreeing to defend and if necessary, pay a claim by a third party against the other party as described in the clause.

  5. #5
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    Mar 2013
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    Default Re: Indemnity

    Quote Quoting Rego
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    Thanks for the reply, jk.

    Does the mirror thing mean that both the buyer and seller walk away after completing the deal and are not liable to each other for any claims arising from any third party?
    No.

    Indemnification clauses survive the completion of the deal but may be limited by any appropriate statute of limitations.

    Quote Quoting Rego
    View Post
    Thanks for the reply, jk.

    In that case, what happens if a third party does file a claim against either party above?
    Depends on what the claim is about.

    Example:

    Buyer buys domain name. 6 months later somebody sues buyer claiming rightful ownership of the domain name. Buyer loses domain name. Buyer then sues Seller for whatever Buyer's financial loss was.

    Can't think of anything going in the other direction.

  6. #6
    Join Date
    May 2013
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    3

    Default Re: Indemnity

    Appreciate the replies.

    Well, I'll explain my situation here - I'm selling a domain name of mine to somebody.
    There is no problem with the outright ownership of this domain.
    I am giving the buyer as much time as they need to investigate whether there are any third party copyright issues concerning the domain keywords.

    Here's where the indemnity comes in:
    I want the buyer to acknowledge that they are satisfied that there are no copyright issues here (they can take as much time as they want to do so); but I want the indemnity to be one-sided - I cannot afford to indemnify them against every nut who claims copyright six months/years from now.

    Having given the buyer ample time to check out the copyright situation, I do want them to indemnify me against potential copyright claims in the future.

    Is asking for one-sided indemnity in this case legal/ethical/acceptable?

  7. #7
    Join Date
    Sep 2012
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    1,988

    Default Re: Indemnity

    There cannot be copyright issues with a domain name

    If you are selling a website and using a template for sale of a domain you are headed for trouble.

    That template only applies to the registered URL not the site and it's content.

  8. #8
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    Mar 2013
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    Default Re: Indemnity

    Quote Quoting Rego
    View Post
    Is asking for one-sided indemnity in this case legal/ethical/acceptable?
    Nothing illegal or unethical about writing a contract that way.

    Acceptable?

    That's something else again.

    What's acceptable to you might not be acceptable to your buyer. Your buyer would have to be very foolish to agree to protect you without you protecting him.

    Obviously, you are free to hand him the contract written your way, on a take it or leave it basis, and whatever he signs he's stuck with. On the other hand, he's free to not buy it if he doesn't like the terms and then you get to find yourself another buyer.

    Here's a bit of advice: There is NOTHING that you can put in a contract that will actually prevent you from being sued, spending a fortune on defense costs, and losing. So you have an indemnification clause and then what? You sue the other guy for indemnification and he goes belly up and files bankruptcy.

    Your contract can be 10 pages of legalese in fine print and not change that or it can be one paragraph or even one sentence (in large type) that says you sell the domain name AS IS with no express or implied warranties or guarantees of any kind and let it go at that.

  9. #9
    Join Date
    Jul 2007
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    Default Re: Indemnity

    My reading of the two clauses says that each party will protect the other against claims arising from a time when the other party owned the domain name. So, if a claim is made about seller's use of the domain from a year ago you would bear all of the liability of that claim. If a new claim arose from the time the buyer of the domain owned it then the buyer would bear all of the liability. In each case the liable party would make the other party whole if any claim was made against them. The same protection is extended to any breach of the agreement. As previously pointed out, there is always performance risk associated with any contractual term. We still put terms in contracts in the hope we can enforce them if the time comes when we need to.

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