When should a purchaser indemnify a supplier?

Another golden oldie, this time ruminating on why service providers seek indemnities from their customers. Often, these indemnities are written in turgid, impenetrable prose, but that is a separate issue.

IP Draughts

safety firstSupppliers of goods and services sometimes require their business customers to indemnify them against third party claims arising from the use of those goods and services.

IP Draughts has reviewed several contracts recently where strong indemnity terms have been included.  This seems to be a trend; IP Draughts doesn’t recall so many contracts having such strong terms in the past, but maybe his memory is failing.  Recent examples to cross IP Draughts’ desk have included the terms of business of two companies that provide IP strategy services, and the master services agreements of several CROs – Clinical Research Organisations – that provide services supporting the clinical development of pharmaceutical products.

Professional services

Whether any indemnity is included in a commercial contract is a matter of commercial policy, which may be informed by practice in the relevant industry sector.  For instance, the standard terms of engagement of Anderson Law LLP do

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