12.3
Liability
High risk
Indemnification
Who pays when a third party sues. Check that it covers IP claims and misuse of your data.
What this clause does
An indemnity is a promise to cover the other side’s costs if a third party makes a claim. In software deals the one that matters most is protection against IP infringement claims about the product you are buying.
What Rubrel flags
Rubrel checks who is indemnifying whom, which claims are covered, and whether the promise includes a duty to defend. It flags one-way indemnities that run from you to the vendor, and IP indemnities that exclude open-source components.
How the redline usually lands
The usual redline makes the IP indemnity mutual in form but vendor-heavy in substance, and adds breach of data obligations. Rubrel marks the change as a tracked insert so your counterparty sees exactly what moved.
Playbook positions
Standard position
The vendor defends and indemnifies us for IP infringement and for its own breach of data obligations.
Fallback
Drop the data-misuse indemnity if the liability cap carve-out already covers it.
Walk-away point