Recorded Webinar: Back to Basics: Drafting Warranties and Indemnities for Maximum Impact

Warranty and indemnity clauses are often a source of dispute during contract negotiation. Their effect is to alter existing common law or statutory rights, so it is essential to get drafting right. This session looks at the issues, including:

Warranties

• Understanding the distinction between warranty and indemnity
• Extent of warranty – is it full or limited?
• Definition of defect or right under warranty - what the warranty does and does not cover
• Warranty period – do you have a time limit?
• The ‘exclusive warranty’ clause – excluding oral promises
• Limitation of liability clause and disclaimers
• Using the term ‘knowledge and belief’ when drafting a warranting
• Defining ‘due enquiry’ in drafting a warranty

Indemnities

• Tailoring the indemnity to each case scenario
• Ambit of the indemnity – removing remoteness from the damages equation
• Structuring the indemnity – ‘hold harmless’ or ‘make good’
• Ensuring obligations can be met – a drafting challenge
• Limitation periods and indemnities
• Obligation to mitigate loss – using indemnities to remove this right
• Some drafting considerations:
  • understanding difference between reasonable and consequential damage
  • can you have a contingent indemnity?
  • source and nature of potential loss or damage
  • allocation of responsibility between parties
  • ability of parties to meet obligation
• Case update