Control of defense: Overview, definition and example
What is control of defense?
Control of defense refers to the right of a party, typically in a legal agreement or contract, to manage and oversee the defense of a claim, lawsuit, or legal action that may affect them. In the context of indemnification or liability clauses, control of defense gives one party (often the indemnifying party) the authority to select legal counsel, decide on the legal strategy, and make decisions related to how the defense will be handled in case of a dispute or claim. This is often an important provision in contracts where one party is agreeing to defend or indemnify another against certain claims or losses.
For example, if a company is sued due to an action performed by one of its suppliers, the supplier may have the right to control the defense of the case, including selecting the lawyer and deciding on the strategy to defend the case, if the contract between the supplier and the company includes such a provision.
Why is control of defense important?
Control of defense is important because it ensures that the party who is financially responsible for defending a claim can manage the strategy and direction of the defense, protecting their interests. It also ensures that legal resources are allocated efficiently and that the defense is aligned with the party’s overall goals and obligations under the contract.
For businesses, control of defense can be essential for minimizing risks and ensuring that legal actions are handled in a way that is consistent with their broader corporate objectives. For parties that are being indemnified, having control over the defense may help ensure that their rights and interests are represented effectively in legal proceedings.
Understanding control of defense through an example
A company signs a contract with a vendor that includes an indemnification clause, stating that the vendor will defend the company if a claim arises related to the vendor’s products. If the company faces a lawsuit due to the vendor's product causing injury, the vendor would have control of defense. The vendor would choose the lawyer, develop the legal strategy, and make all decisions related to the defense of the lawsuit, with the company being informed of developments and possibly consulted on major decisions.
In another example, a consultant agrees to indemnify a client against certain claims. If the client is sued due to the consultant’s advice, the consultant would have the right to control the defense, including hiring an attorney, choosing whether to settle or contest the claim, and deciding how to handle any legal challenges in the case. The client may still be involved in decisions, but the consultant would oversee the defense strategy.
An example of control of defense clause
Here’s how this type of clause might appear in a contract:
“The Indemnifying Party shall have the sole and exclusive right to assume the defense of any claim, action, or proceeding subject to indemnification under this Agreement. The Indemnifying Party may select counsel of its choice, and shall control the defense, including all decisions relating to settlement, litigation strategy, and the conduct of the case. The Indemnified Party shall cooperate with the Indemnifying Party in defending the claim and shall have the right to participate in the defense at its own expense.”
Conclusion
Control of defense is a key concept in legal agreements, particularly in indemnification clauses, allowing one party to manage and direct the defense in case of a legal claim. This right ensures that the party assuming the responsibility for defense has the ability to make decisions that align with their best interests and legal strategy. Whether in business contracts, service agreements, or vendor relationships, control of defense provides clarity and helps manage the risks associated with legal disputes, ensuring the defense is handled efficiently and effectively.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.