Indemnification Clause
(Deductible)


Summary

This form of indemnification clause provides for indemnification by each of the seller and buyer for breaches of representations and warranties, covenants and other itemized occurrences. The indemnification is subject to a deductible: a threshold amount that must be reached for indemnification recover and after which the indemnified party may recover only losses in excess of such amount. This clause includes practical guidance, drafting notes, and optional clauses. Click here to see recent examples of publicly filed acquisition agreements containing a deductible basket in Market Standards - M&A. Indemnification may also be limited by a "tipping basket" where, once the threshold amount is reached, the indemnified party may recover all losses from the first dollar or a combination approach where once the threshold amount is reached, recovery begins from some other amount. For an example of these clauses, see Indemnification Clause (Tipping Basket) and Indemnification Clause (Combination ...