“Not if I had a hundred tongues, a hundred mouths,
a voice of iron, could I tell all the forms of wickedness
or spell out the names of every torment.”
– Virgil, The Aeneid, Book VI, II 625-627 (Circa 29 BCE)
“‘Let us go on, for the long way impels us.’
Thus he went in, and thus he made me enter
The foremost circle that surrounds the abyss…”
– Dante’s Divine Comedy, Inferno (Canto 4)
“Would thou hadst hearkened to my words, and stayed
With me, as I besought thee, when that strange
Desire of wandering, this unhappy morn,
I know not whence possessed thee!”
– John Milton, Paradise Lost: IX (par. 1134-1137)
It wasn’t until well into my 20s that I had a say in the major decisions in my life. On reflection, that is probably a good thing since, after all, it is generally accepted in the neuropsychological-scientific community that the brain does not fully develop until then, and my track record was not exemplary. One such decision I had no say in was where I was going to high school. My mom simply picked the one she went to. Of course, she had a list of reasons. Thankfully, she steered me that direction, although at the time it was met with much resistance. The name of the school reflected something I could only aspire to be: “Pius.” Piety was one of antiquity’s classic virtues, (admonishing us to do our duty to country, parents or higher power), and a characteristic of Rome’s mythological founding father, Aeneas, the protagonist of Virgil’s epic poem, The Aeneid.
The Aeneid tells the tale of Aeneas, son of mortal Anchises and goddess Aphrodite, who sailed from the ruins of Troy to land in Italy, where he became the purported patriarch of the Imperial House of Caesar. On his journey, an oracle helped him with some major life decisions, steering him just around the mouth of Tartarus – Grecian Hell – where, interestingly enough, the poem’s author would fictionally fathom its depths, along with Italian author Dante, in his Divine Comedy. The first quote above, from Aeneas’s oracle-guide as they strode by the gates of hell, is merely a “guesstimate” of the immeasurable suffering of hell’s deserving denizens. I am sure by now you have also drawn the comparison, as I think my mom must have had a similar list in mind had I gone to public high school. (The third quote above, from Milton – who knew a thing or two about heaven and hell – is a good reminder to pay attention to the wisdom of our elders!) I am certain one of the punishments awaiting us in the great beyond is negotiating for all eternity overreaching and onerous indemnity clauses with a client that always rejects our track changes.
My series on indemnity clauses has been shifting back and forth between an assessment of the who, what, when, where, why and how, which are essential in determining their fairness and enforceability. (I promise there is rhyme and reason to this method). This time we step away from the How to look at What, specifically what kinds of things these clauses seek to impose an indemnity obligation for. Recall from our last article, we differentiated between the terms “indemnify” and “defend” and “hold harmless.” This is an important distinction for what we apply those terms to. Indemnity clauses will vary in their scope and inclusiveness when listing all of the “thing or things that” you will owe your client an indemnity obligation for. Much like the suffering only a hundred tongues and mouths could utter, the list can at times get a little long and loquacious.
Typically, after defining the Indemnitee and Indemnitor, and stating whether the clause requires just an indemnity obligation or also a defense and hold harmless obligation, the indemnity clause will next launch into the list of offenses that you will need to address as the Indemnitee. The list typically gets defined as a list of “claims,” but can include a number of things, such as:
“…any suit, action, claim, demand, damage, losses, liabilities, costs, expenses, charge, allegation, complaint, judgment, settlement, lien, civil or criminal penalty, fines, cause of action, proceeding or government enforcement action, of any and every kind, nature and character made, brought or asserted by a third party, including without limitation a governmental or quasi-governmental authority…”
Harkening back to the concept of what is included in “defend,” and if that obligation is imposed, the resulting indemnity responsibility could be triggered at a very early stage. If there is merely a demand or claim letter served upon your client, which they then tender to the design professional, the metaphorical meter will immediately start running. The dollars can be significant because typically the lawyers for your clients charge a substantial hourly rate.
It would be my recommendation to attempt to limit this list as much as possible to things which are or could be adjudicated. Meaning, scale back your indemnity obligation to only “damages, losses, costs and/or judgments,” as opposed to being exposed to every enumerable type of “what” under the sun. Frankly, I am not sure it matters much whether the list is so lengthy, because the client will still tender anything they believe to be your responsibility under this clause, but it would not hurt to keep the list short. Try scaling the list down and if they reject your edits, then at least you tried.
Typically, liabilities and damages are defined to include all related costs and expenses of the “claim,” including attorney’s fees, expert expenses, investigation expenses, cost of suit, litigation or arbitration (including the filing fee, cost of arbitrators) and costs of settlement or judgment, along with interest and penalties. If the clause includes these items, I would suggest trying to edit this language down to just “reasonable attorney’s fees,” and cut out all of the rest of it. In most states, “costs of investigation and experts” are not typically recoverable, and without this kind of contract language or an applicable statute, costs of suit are generally borne by each party.
While I am sure the ancient oracle-guide to our hero Aeneas could have dreamt up literally thousands of things they could have suffered had they taken the path to the left (and into the mouth of Tartarus), they were spared that fate by being good editors. So too did my mom guide me right, because, as you will read in future articles, the nuns did such a good job with me. When editing your indemnity clause, get out the red pen and shorten the list of things you could be exposed to under these clauses or else your descent to the netherworlds will be merciless…
As a reminder, you can find the other entries in my exploration of indemnity clauses here:
Part Two: How? (First of three)
And remember intrepid travelers, there are many more stories to come! Stay tuned!