Drafting Software Agreement Warranty, Limitation of Liability and Indemnification Provisions

Negotiating Clauses That Protect Against Service Defects, Limit Potential Damages and Allocate Risk

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, May 11, 2016

Recorded event now available

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Program Materials

This CLE webinar will provide guidance to technology and business counsel for drafting and negotiating enforceable limitation of liability (LOL), indemnification and warranty provisions in software agreements. The panel will discuss key considerations when crafting the clauses, potential enforceability challenges, and the interplay between the provisions.

Description

Warranty, LOL, and indemnification provisions are among the most complex and confusing, yet extremely important, clauses in software contracts. Technology and business counsel must strategically negotiate these provisions to ensure that their clients’ rights are adequately protected.

Warranty provisions provide assurance that the software will perform in accordance with the contract specifications. Software developers frequently seek broad disclaimers of warranties provisions and strict indemnification clauses.

LOL provisions are intended to cap the dollar amount and limit the type of damages the parties pay in the event of breach of contract. They need to be drafted so that they are not ambiguous and both the software vendor’s and the customer’s interests should be taken into account when negotiating them.

Indemnification clauses allow the parties to contractually shift risk and reduce liability exposure for third-party claims that may be brought against them when entering into an agreement with the other party. Effective indemnification clauses clearly outline risks that are indemnified, exclusions from indemnity, and procedures for making an indemnification claim. Different state laws may affect certain aspects of these provisions.

Listen as our authoritative panel explains best practices for drafting and negotiating warranty, LOL, and indemnification provisions in software agreements. The panel will provide strategies for avoiding common negotiation pitfalls, anticipating and overcoming enforcement hurdles, and reconciling the three different clauses.

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Outline

  1. Drafting considerations and best practices for warranty, LOL, and indemnification clauses
  2. Interplay between provisions
  3. Enforceability challenges

Benefits

The panel will review these and other key issues:

  • How can technology and business counsel best mitigate and allocate risk when drafting and negotiating warranty, limitation of liability, and indemnification provisions in software agreements?
  • What are commonly negotiated warranty and indemnification provisions for the different types of software and technology agreements?
  • What are the most commonly disputed issues when negotiating these clauses and what are some effective strategies for resolving them?
  • How should the various state laws and the courts’ varying interpretations of indemnification provisions impact the drafting of these provisions and the parties’ ability to recover?
  • What challenges do parties commonly face when seeking to make an indemnification claim?

Faculty

John M. Neclerio
John M. Neclerio

Partner
Duane Morris

Mr. Neclerio is co-chair of the firm's Technology Transactions and Licensing Practice Group. He regularly provides...  |  Read More

Cecilia Y. Oh
Cecilia Y. Oh

Partner
Hunton & Williams

Ms. Oh has extensive experience in negotiating a wide range of technology transactions, including those involving...  |  Read More

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