How does an indemnity differ from a warranty?

A warranty is a factual assurance whose breach triggers a damages claim; an indemnity is a direct promise to pay defined losses, often without needing to prove breach or causation in the usual way.

Can an indemnity cover losses that exceed normal damages?

Yes. An indemnity can be drafted to cover losses that would be too remote to recover as ordinary damages, which is exactly why its scope needs to be negotiated carefully.

Does Dutch law treat indemnities differently from damages clauses?

Dutch law has no dedicated indemnity statute, so an indemnity is interpreted as a contractual obligation under general BW rules. Courts look at the agreed wording and apply reasonableness and fairness to resolve ambiguity.

Should an indemnity be mutual or one-sided?

It depends on the risk profile. IP-infringement indemnities in software contracts are typically one-sided (vendor to customer); M&A deals often have mutual indemnities for specific warranty breaches.

What is a "tax indemnity" in an acquisition context?

A tax indemnity obliges the seller to compensate the buyer for tax liabilities that arose before closing but were not accounted for in the price. It is separate from general warranty coverage and often has its own cap and time limit.

Indemnity

A contractual promise to compensate another party for specified losses or third-party claims.

Définition

An indemnity is an undertaking by one party to bear or reimburse defined losses suffered by the other, often arising from third-party claims such as IP infringement or data breaches. Unlike ordinary damages, an indemnity can shift risk directly and may cover losses that would not otherwise be recoverable under general damages rules. Dutch law has no dedicated indemnity statute, so the scope is governed by what the parties expressly agree, read against reasonableness and fairness.

Exemple

A software vendor indemnifies its customer against claims that the licensed product infringes a third party's patent.

Pourquoi c'est un risque pour l'entreprise

An indemnity can be one of the most financially significant clauses in a contract, yet it is often buried in boilerplate. If scope is unclear, a dispute about whether a loss is covered can cost more than the loss itself. Businesses that grant overly broad indemnities, or fail to cap them, can face open-ended exposure from third-party claims they never anticipated.

Comment le gérer

Define the covered events precisely: vague language such as "any claim" creates much wider exposure than intended.
Always cap the indemnity (or link it to your liability cap) so potential exposure is known and insurable.
Require the indemnified party to notify you promptly and let you control the defence of any third-party claim.
Check whether your professional indemnity or product-liability insurance covers the indemnity you are giving.

Références juridiques

BW 6:74 Dutch Civil Code: liability for damages Droit néerlandais

Sauf mention contraire, les références renvoient au droit néerlandais (Burgerlijk Wetboek, le Code civil néerlandais) ; les instruments de l'UE tels que le RGPD s'appliquent dans toute l'UE. Il s'agit d'informations générales, pas de conseils juridiques. D'autres juridictions traitent ces concepts différemment. Vérifiez le texte en vigueur et votre situation avec un avocat qualifié.

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