Cooperation by indemnitee: Overview, definition, and example
What is cooperation by indemnitee?
Cooperation by indemnitee refers to the obligation of a party receiving indemnification (the indemnitee) to assist the indemnifying party in handling claims, legal proceedings, or defense efforts related to the indemnification. This cooperation may include providing necessary documents, sharing relevant information, or participating in legal proceedings as needed.
This clause ensures that the indemnifying party has the necessary support to properly defend against claims and prevent unnecessary liability.
Why is cooperation by indemnitee important?
Cooperation is crucial because it allows the indemnifying party to:
- Effectively manage legal claims by accessing relevant information and resources.
- Avoid unnecessary costs or complications that could arise if the indemnitee fails to assist.
- Ensure fair and efficient resolution of claims covered under the indemnification agreement.
Without cooperation from the indemnitee, the indemnifying party may struggle to defend against claims, leading to increased legal exposure and financial losses. Some agreements specify that failure to cooperate may limit or void the indemnitee’s right to indemnification.
Understanding cooperation by indemnitee through an example
Imagine a software company is sued for copyright infringement based on a third-party component supplied by a vendor. The vendor has agreed to indemnify the company against such claims. However, to successfully defend the case, the vendor requires certain documents and technical specifications from the software company.
If the software company (indemnitee) refuses to cooperate by providing necessary records or testimony, it could weaken the vendor’s defense and potentially result in a larger financial settlement. A cooperation clause ensures that the indemnitee actively participates in the process, supporting the indemnifying party’s efforts.
An example of a cooperation by indemnitee clause
Here’s how a cooperation by indemnitee clause might appear in a contract:
“The Indemnitee agrees to provide reasonable cooperation in the defense of any claim for which indemnification is sought, including but not limited to providing documents, testimony, and other relevant information. Failure to provide such cooperation may impact the Indemnitee’s right to indemnification under this Agreement.”
Conclusion
A cooperation by indemnitee clause ensures that indemnification agreements function smoothly by requiring the indemnitee to assist in defending claims. This helps prevent unnecessary financial losses, facilitates a fair resolution of disputes, and protects both parties’ interests. Businesses should carefully review such clauses to understand their obligations and avoid unintended consequences.
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.