Mutual Indemnity Agreement Template

This Mutual Indemnity Agreement (the “Agreement”) is entered into as of [Effective Date] by and between:

Party A: [Legal Name], a [State/Country] [entity type], address: [Address] (“Party A”).
Party B: [Legal Name], a [State/Country] [entity type], address: [Address] (“Party B”).

Party A and Party B may each be referred to as an “Indemnifying Party” or “Indemnified Party,” as applicable.

1. Definitions

1.1 Claim means any third-party claim, demand, action, suit, or proceeding.
1.2 Losses means damages, judgments, settlements, penalties, fines (to the extent permitted), and reasonable attorneys’ fees and costs.
1.3 Affiliate (optional) means: [Define if needed].

2. Mutual Indemnity

2.1 Indemnity by Party A. Party A will indemnify Party B from and against Losses arising out of any Claim to the extent caused by:
(a) Party A’s negligence or willful misconduct;
(b) Party A’s breach of this Agreement; or
(c) Party A’s violation of applicable law.

2.2 Indemnity by Party B. Party B will indemnify Party A from and against Losses arising out of any Claim to the extent caused by:
(a) Party B’s negligence or willful misconduct;
(b) Party B’s breach of this Agreement; or
(c) Party B’s violation of applicable law.

2.3 Comparative Fault. Losses will be allocated based on the Parties’ relative fault to the extent permitted by law.

3. Defense and Control (Optional)

3.1 Duty to Defend (Select One):
☐ Indemnifying Party has a duty to defend the Claim with counsel reasonably acceptable to Indemnified Party.
☐ No duty to defend; indemnity covers Losses after determination/settlement only.

3.2 Control of Defense: If a duty to defend applies, Indemnifying Party controls the defense, provided that Indemnified Party may participate with its own counsel at its own expense (unless conflict of interest).
3.3 Settlement Consent: Indemnifying Party may not settle any Claim without Indemnified Party’s consent if the settlement: (i) includes an admission of fault by Indemnified Party, (ii) imposes injunctive relief on Indemnified Party, or (iii) does not include a full release of Indemnified Party.

4. Indemnification Procedure

4.1 Notice. Indemnified Party will provide prompt written notice of any Claim, but failure to give prompt notice will only reduce obligations to the extent the Indemnifying Party is materially prejudiced.
4.2 Cooperation. Indemnified Party will reasonably cooperate in the defense and provide information as needed.
4.3 Mitigation. Each Party will use reasonable efforts to mitigate Losses.

5. Exclusions

5.1 No Party is required to indemnify the other for Losses to the extent caused by the other Party’s negligence, willful misconduct, or breach.
5.2 Optional additional exclusions: [List].

6. Limitation of Liability (Optional)

6.1 Consequential Damages: ☐ excluded ☐ not excluded.
6.2 Liability Cap (Select One):
☐ No cap
☐ Cap at $[Amount]
☐ Cap at fees paid under [agreement] in last [__] months
☐ Other: [Cap]

6.3 Carve-Outs (Optional): Liability limits do not apply to: ☐ indemnity obligations ☐ confidentiality breaches ☐ IP infringement ☐ willful misconduct ☐ other: [List].

7. Insurance (Optional)

7.1 Each Party will maintain: ☐ general liability ☐ professional liability ☐ other: [Types], with limits of at least $[Amount].
7.2 Proof of insurance will be provided upon request.

8. Term

8.1 This Agreement begins on the Effective Date and remains in effect until terminated by either Party with [__] days’ notice.
8.2 Sections intended to survive (indemnity, limitations, etc.) survive termination.

9. Notices

9.1 Notices must be in writing and delivered to the addresses above.

10. Governing Law

10.1 This Agreement is governed by the laws of [State/Country].

11. Entire Agreement

11.1 This Agreement is the entire agreement regarding mutual indemnity between the Parties.

Signatures

Party A: [Legal Name]
Name/Title: [Authorized Signer]
Date: [Date]
Signature: ___________________________

Party B: [Legal Name]
Name/Title: [Authorized Signer]
Date: [Date]
Signature: ___________________________