This next nugget drills down the specifics of an indemnification clause. As a reminder, the purpose of the clause is for the seller to indemnify, or reimburse, the purchaser for loss or damage. Exactly what event or occurrence should the seller indemnify the purchaser for? First, the seller should indemnify the purchaser of any inaccurate statements (representation or warranty) made in the purchase agreement by the seller that the purchaser is relying on. Second, the seller’s indemnity should kick in if the seller breaches (does not perform) any obligation under the purchase agreement. Lastly, the seller’s indemnity should be demanded if the purchaser incurs any loss that arises from the operations of the business prior to the closing. By including these items in the indemnification clause, you will cover the “what” of the indemnification issue.
ABOUT GLENN D. SOLOMON
Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With 120 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our eight offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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