Legal Blog

M & A Nuggets: Indemnification – Let’s Get Specific No. 2


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.


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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 businessesstructuring ownership agreements, and advising companies in financial distress






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