Language Precision in Vendor Contracts

"Each of Vendor and Client shall indemnify the other for any third party claims arising out of the Services." For some of you, the #ContractTrap in that statement seem obvious. But sadly, I still see language like this a fair amount. The problem is that it's not clear at all which party is indemnifying the other. If Vendor gets sued for IP infringement based on Client's use of the Services, is Client supposed to indemnify Vendor? If Client gets sued for the same thing, is Vendor supposed to indemnify Client? And what if they both get sued (as often happens)? Are they each indemnifying the other? None of this makes much sense. And when things don't make sense, you don't know how they will play out if there's a dispute. I suspect that the way this language appears is that someone's template has a broad indemnity in their favor - e.g., "Vendor shall indemnify Client for any third party claims arising out of the Services." And then the Vendor demands that clause be made mutual, resulting in the problematic language. So what do you do instead? Think about what each party really should be indemnifying the other for, and specify that. If it makes sense for both parties, the fix could be as simple as "Each party shall indemnify the other for claims relating to the Services to the extent arising out of the actions or wrongful omissions of such party." Sometimes it's more complicated - you may want to specify certain claims (e.g., IP infringement) as the risk of one party and other claims (e.g., data security) as the risk of the other. But whatever you do, don't wind up in a situation where each party is indemnifying the other for the very same claim! #contracts #inhousecounsel

The biggest risk your company faces Is the ambiguity hiding inside your contracts. Why? Because uncertainty does not just cause confusion — it causes conflict. I have seen it firsthand: → Agreements fall apart because a single clause was open to interpretation → Projects stall when deliverables are unclear → Trust fades when expectations are misaligned And when things go wrong: → You lose money → You lose time → You damage relationships you worked years to build It is not the complexity of law that causes these issues. It is the absence of legal precision. Over my 24 years in legal leadership, I have seen this truth play out across industries. Here is what legal precision actually looks like: 1/ Define everything – Never assume the other party understands your intent – Spell out responsibilities, terms, and outcomes in exact language 2/ Use plain language – Legal does not have to mean complicated – Clear communication protects everyone involved 3/ Anticipate edge cases – Think beyond the best-case scenario – Define what happens if things change, delay, or derail 4/ Align legal with business – Legal is not a blocker — it is a builder – Involve legal teams early to build stronger and scalable agreements 5/ Build trust with clarity – Nothing builds confidence like knowing where you stand – Precise contracts reflect mutual respect and foresight Ambiguity invites risk. Precision builds resilience. 📌 Start seeing your legal team as a strategic asset, not a safety net. P.S. What is one legal lesson you have learned the hard way? ♻️ Repost to remind others that clarity is protection ➕ Follow @Priyadarshi Sidhartha for more governance insights #LegalLeadership #CorporateLaw #GovernanceExcellence #ContractManagement #BusinessStrategy #CXOInsights #LegalPrecision #RiskMitigation

"𝐁𝐞𝐬𝐭" 𝐎𝐑 "𝐑𝐞𝐚𝐬𝐨𝐧𝐚𝐛𝐥𝐞" 𝐄𝐟𝐟𝐨𝐫𝐭𝐬 ... 𝐖𝐡𝐢𝐜𝐡 𝐖𝐢𝐥𝐥 𝐖𝐨𝐫𝐤 𝐅𝐨𝐫 𝐘𝐨𝐮 Did you know there's a major legal difference between "best efforts" and "reasonable efforts" in contracts? I recently saw a client lose significant payment because their agreement used the wrong terminology. When drafting agreements, precision matters enormously. 𝑽𝒂𝒈𝒖𝒆 𝒕𝒆𝒓𝒎𝒔 𝒍𝒊𝒌𝒆 "𝒕𝒊𝒎𝒆𝒍𝒚," "𝒑𝒓𝒐𝒎𝒑𝒕𝒍𝒚," 𝒐𝒓 "𝒂𝒔 𝒔𝒐𝒐𝒏 𝒂𝒔 𝒑𝒐𝒔𝒔𝒊𝒃𝒍𝒆" become litigation goldmines for difficult clients who want to avoid payment. Here's what successful businesses do differently: they replace ambiguous language with specific timeframes and measurable deliverables. 𝑰𝒏𝒔𝒕𝒆𝒂𝒅 𝒐𝒇 "𝒅𝒆𝒍𝒊𝒗𝒆𝒓𝒆𝒅 𝒑𝒓𝒐𝒎𝒑𝒕𝒍𝒚," 𝒘𝒓𝒊𝒕𝒆 "𝒅𝒆𝒍𝒊𝒗𝒆𝒓𝒆𝒅 𝒘𝒊𝒕𝒉𝒊𝒏 5 𝒃𝒖𝒔𝒊𝒏𝒆𝒔𝒔 𝒅𝒂𝒚𝒔." 𝑹𝒂𝒕𝒉𝒆𝒓 𝒕𝒉𝒂𝒏 "𝒓𝒆𝒂𝒔𝒐𝒏𝒂𝒃𝒍𝒆 𝒒𝒖𝒂𝒍𝒊𝒕𝒚," 𝒅𝒆𝒇𝒊𝒏𝒆 𝒆𝒙𝒂𝒄𝒕 𝒔𝒑𝒆𝒄𝒊𝒇𝒊𝒄𝒂𝒕𝒊𝒐𝒏𝒔 𝒂𝒏𝒅 𝒂𝒄𝒄𝒆𝒑𝒕𝒂𝒏𝒄𝒆 𝒄𝒓𝒊𝒕𝒆𝒓𝒊𝒂. This approach has helped my clients avoid countless disputes and bad debts. When expectations are crystal clear, customers have fewer opportunities to create payment delays through manufactured disagreements. Remember: every ambiguous word in your contract is a potential loophole for non-payment. What contract terms have caused you headaches? Let's discuss how clearer language could protect your business.

The 5 Love Languages? Nah, Let’s Talk About Contract Languages! Love won't save you from a bad deal, but proper contract language will. Here's what really matters in the language of business: 1. Clarity Language "I thought you meant..." = fastest route to court. Every term needs crystal-clear definition. Real talk: "Reasonable timeframe" means nothing. "Within 14 business days" means everything. 2. Obligation Language "May" = Maybe "Shall" = You better do it Think: "Vendor may provide updates" vs. "Vendor shall provide monthly updates by the 1st" 3. Protection Language Because life happens! Your Force Majeure clause is like relationship insurance for when: ✓Pandemics hit ✓Natural disasters strike ✓Aliens invade (hey, better safe than sorry!) 4. Exit Language Clean breakup > messy divorce Your termination clause is your prenup. Know how to walk away before you walk in. 5. Value Language Both parties must benefit. One-sided contracts are like one-sided relationships—toxic and usually unenforceable. 💡 Pro Tip: The most overlooked? Clarity Language. People assume others think like them. Spoiler: They don't. Need help with contract drafting or review? Let’s connect! 🔄 Share this if you've ever wished you'd read the fine print more carefully! #BusinessLaw #Contracts #Entrepreneurship #LegalTips #BusinessAdvice