Kavitha Gupta's blog

  Guarantees and Indemnities” - Guarantees or Indemnities? Catalyst Business Finance Limited v. Very Tangy Television Limited, Richard Tuckwell, Very Tangy Media Limited [2018] EWHC 1669 (QB). The judgment  will be of great interest and value to invoice financiers and commercial lenders when considering the drafting and enforceability of their guarantees and indemnities. Not only does it affirm a lender’s entitlement to rely on a conclusive evidence clause (following Van der Merwe v IIG Capital LLC [2008] EWCA Civ 542), but it also provides helpful clarification on the distinction between a guarantee and an indemnity. An indemnity creates a primary obligation on the surety to pay a debt that is independent of the liability of the borrower under a finance facility, so it is not necessary to prove first the borrower is liable for the principal debt under the facility. A guarantee meanwhile, is a secondary obligation that is usually contingent on the borrower’s default. Generally...

Indemnities for cyber risks - a customer viewpoint James Walsh 18/11/2019 In  a recent article , I highlighted that the cyber insurance suppliers have in place may not extend to cover broad indemnities offered by the supplier for cyber and other GDPR-related risks. But what, I have been asked since, is the right position for a customer to take? Clearly some take the view that customers should seek to pass liability for cyber and GDPR-related risks down their supply chain for incidents caused or contributed to by their suppliers, even if suppliers may have difficulties obtaining insurance cover for the risks. I have certainly had occasion to negotiate similar positions for some clients. However, there are a number of very practical reasons why a customer may be better off not seeking broad indemnities for cyber risks in their supply contracts: 1.  Losses suffered by a customer for a cyber incident can often be recovered under normal principles of contract la...

http://www.slideshare.net/secret/EOsZT3pqwSMUWI There is much flexibility in drafting terms of indemnity provisions and insurance clauses in contracts for the provision of goods and services. The circumstances unique to the transaction should be considered. For instance, general terms like “losses” and “damages” or “seller” and “buyer” should be defined as accurately as possible. It is important to include the provision that the contract’s indemnity and insurance coverage are the exclusive remedy available to the indemnitee for all claims that may arise. Failure to do so may enable an indemnitee to “sidestep” the contractual indemnity. Provisions should also address the mechanics of how indemnity and defense coverage is provided.