You will indemnify and hold us harmless from and against all damages, losses, and expenses of any kind (including reasonable legal fees and costs).
That’s an indemnification clause. It means that you are responsible for covering the legal fees of the other side, even if the claim is ludicrous. Legal fees are expensive. Legal fees are incurred even if your side wins the litigation. Don’t expose your startup to someone else’s legal fees.
We refuse to sign indemnification clauses with our partners.
Indemnification clauses are abused in litigation. If your startup is party to a lawsuit and your opponent learns that you have signed indemnification clauses with your partners, they will add your partners to the lawsuit to drive up your legal bills. In a counter-intuitive way, your partners are more protected without this clause.
When you see indemnification clauses in agreements, get rid of them.
What are your thoughts on indemnification clauses?
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