Indemnification Provisions in Private Acquisition Agreements

Summary

Many agreements used for acquisitions of privately held companies (or portions of publicly traded companies) contain detailed indemnification provisions specifying the rights and remedies of the parties in the event of a breach. The purpose of indemnification provisions is to lay out the circumstances and manner in which (i) the buyer can seek remedies from the seller for committing any pre-closing breaches and (ii) the seller can resist the buyer's attempts to claw back the purchase price. This practice note will discuss considerations for drafting and negotiating indemnification provisions in acquisition agreements. For a sample provision see Indemnification Clause. Click here to see recent examples of publicly filed acquisition agreements in which indemnification is the exclusive remedy in Market Standards, the Practical Guidance database of publicly filed M&A deals that enables users to search, compare, and analyze transactions using more than 150 M&A deal points to filter search ...