Indemnification provisions are contractual clauses that allocate risk between parties, ensuring that one party will compensate the other for certain damages or losses incurred during the execution of a contract. These provisions serve to protect parties from financial liability arising from claims, lawsuits, or other legal actions linked to the contract, and often specify the scope and limitations of the indemnification obligations. Their inclusion in contracts is vital for establishing clear expectations regarding responsibility for potential risks in business transactions.
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