Into the Legalese Thicket
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In the January issue of the PMA Newsletter, you’ll find my introduction to the topic of standard contracts (See “When and How to Use Your ‘Standard’ Contracts,” page 1). Now it’s time to flesh out some the suggestions made in that earlier article. In this piece, I’ll consider one of the most valuable (and hard to pronounce) clauses to include in your standard contracts: the”Indemnification and Hold Harmless” clause.
In this type of clause, one party to a contract (the author) agrees to pay for any harm which the other party (the publisher) suffers because of a breach of the contact by the first party (the author). For example, if an author “indemnifies” you against copyright infringement claims, and you are later sued by a stranger who claims the authors’ book infringed that stranger’s copyright, then you (the publisher) have the right to ask the author to pay the costs of the suit.
If properly drafted, your Indemnification Clause can cover the press against a number of potential costs:
Lost profits suffered because of the alleged violation or breach. For example, if you pull a book from store shelves because of a court order, you can seek reimbursement of lost profit from the author.Costs of defending any lawsuit brought or threatened because of the alleged violation. These can include “reasonable” attorneys’ fees, court costs, and expenses such as court reporter’s fees. These fees can be substantial, even if you prevail on the merits of the suit.
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