The terms of your SaaS agreement typically contain compensation to protect you or your SaaS customer. The nature and nature of these offsets and the portion it should give depend on the nature of the SaaS software used and the division in which your customer operates. When it comes to trade agreements, a key element, often included, is a compensation provision. This is essentially an obligation for the licensor to be held liable for losses that may arise in the event of a problem (sometimes the licensor may also receive compensation from the customer, but this is less common). For example, if you license a technology and there is an inherent error that has caused a data protection breach, the indemnification clause would specify that you are responsible for things such as attorneys` fees or damages suffered by the third party. While a indemnification clause is a fairly standard element of tech licensing agreements, there are some potential parts of a clause that can cause major problems. Here are some examples. A indemnification provision to reduce or eliminate the risk arising from third party claims is not the risk that a party will breach the Agreement. Such language turns a compensation provision into a backdoor to include a provision for attorneys` fees and can offer additional means in the event of an infringement action. Always avoid that.
Christopher is a business expert, trial lawyer and entrepreneur. He assists clients in conducting strategic analysis, contracts, business start-ups, IP and technology rights, marketing and advertising matters, and general business activities. For example, some clauses contain the requirement that a technology licensor not compensate you if the IP rights on which a claim for infringement is based are issued/registered after the original date of the contract. . . .