Top 5 Things to Consider Before Signing a Hold Harmless Agreement in Dallas
Agreements for Liability Protection Growing Commonly in Dallas and US: UpCounsel's Business Lawyers Understand2 min read
As the business lawyers at UpCounsel understand, agreements that require one party to protect another from a variety of damages, losses, or liabilities are becoming more common in Dallas and throughout the United States. These agreements, known as hold harmless agreements, are legally binding commitments that can potentially protect a party from future claims or legal action. Whether you’re a small local business in Dallas or a large organization based in the United States, it’s essential to understand the purpose and the potential risks associated with these agreements.
When considering entering into a hold harmless agreement, it’s important to understand the principles of indemnification and the underlying risks associated with them. Indemnification is a legal concept in which one party agrees to assume responsibility for a potential loss incurred by the other party. An indemnitor typically agrees to hold the indemnitee harmless from any legal claims or financial liability related to some activity. In return, the indemnitee agrees to pay the costs associated with settling a claim in the name of the indemnitor.
When creating a hold harmless agreement, here are the top five things you should consider:
1. Scope of Liability: It’s important to clearly define the scope of liability in the agreement. Generally speaking, the indemnifier will agree to protect the indemnitee from any claims resulting from the indemnifier's activities. It’s important to clearly state this scope of liability so both parties understand the full scope of their legal responsibilities.
2. Exceptions to the Agreement: A hold harmless agreement should detail all of the exceptions that are not covered by the indemnifier. This is important because it will help protect the indemnifier from any liability related to the exceptions that may arise.
3. Legal Fees: It’s important to state who is responsible for paying for any legal fees that may arise from a legal action resulting from a breach of the hold harmless agreement. Generally speaking, the indemnifier will be responsible for these costs, but it’s important to clearly state this in the agreement.
4. Insurance Coverage: When creating a hold harmless agreement, it’s important to determine who is responsible for acquiring insurance coverage related to the agreement. Generally speaking, the indemnifier will be responsible for obtaining the insurance coverage.
5. Third-Party Indemnification: It’s important to understand if the indemnitor is obligated to protect the indemnitee from any potential claims that may arise from a third-party. Generally speaking, the indemnitor will not be responsible for these types of claims, but it’s important to state this clearly in the agreement.
Entering into a hold harmless agreement can be a tedious and complicated process, and it’s important to make sure that the agreement is drafted properly. The experienced lawyers at UpCounsel are committed to helping businesses in Dallas understand and navigate these complex agreements. Whether you need a one-time consult or an entire freelance legal department, UpCounsel’s network of experienced lawyers has you covered.