INDEMNITY AND LIABILITY CLAUSE PACK
Mutual Indemnity (Balanced)
Each party (“Indemnifying Party”) will indemnify, defend, and hold harmless the other party and its affiliates from third-party claims, damages, fines, and reasonable attorneys’ fees to the extent arising from: (a) Indemnifying Party’s breach of this Agreement; (b) gross negligence or willful misconduct; and (c) infringement of third-party IP by Indemnifying Party’s materials, except to the extent caused by the Indemnified Party’s misuse or modifications not provided by the Indemnifying Party.
One-Way Indemnity (Provider → Customer)
Provider will indemnify, defend, and hold harmless Customer from third-party claims alleging that Provider’s products/services infringe IP rights, subject to exclusions for combinations, modifications not provided by Provider, and use outside scope. Provider may: (1) procure rights; (2) modify to be non-infringing; or (3) terminate affected services with a refund of prepaid unused fees.
Customer Data/Use Indemnity (Customer → Provider)
Customer will indemnify, defend, and hold harmless Provider from third-party claims arising from Customer Data, Customer’s use in violation of law or this Agreement, or use with non-Provider systems that causes the claim.
Caps on Liability
Cap: Each party’s aggregate liability is capped at the fees paid/payable in the 12 months preceding the claim (or $[AMOUNT] for no-fee deals), except for Excluded Claims.
Excluded Claims: (a) IP infringement indemnity obligations; (b) gross negligence or willful misconduct; (c) breach of confidentiality; (d) data breach caused by a party’s failure to use required security controls; (e) fees due and payable.
Consequential Damage Waiver
No party is liable for indirect, incidental, special, exemplary, or consequential damages, or loss of profits/revenue, business interruption, or loss of data, even if advised of their possibility, except to the extent arising from Excluded Claims.
Supercap for Security/Data Breach (Optional)
Notwithstanding the cap, liability for a proven data breach caused by a party’s failure to maintain agreed security controls is capped at the greater of: (a) [2]x fees paid/payable in the 12 months preceding the claim; or (b) $[AMOUNT]. Excluded Claims still apply.
Defense Control
The indemnifying party controls the defense and settlement of indemnified claims, except it may not settle any claim without the indemnified party’s consent if the settlement imposes non-monetary obligations on, or admits liability by, the indemnified party. The indemnified party may participate with its own counsel at its expense.
[// GUIDANCE: Tune caps to deal size; align with insurance. Ensure exclusions and supercaps are consistent. For government/health/finance, add regulatory carve-outs and required notices.]