Office of General Counsel

University of Mississippi

Contract Training

Limitations of Liability and Indemnification Provisions Scenario Explanation

“Both parties agree to be responsible for the acts of their employees in the performance of this agreement.”  This provision is acceptable — the University can agree to be responsible for the acts of its employees. 

 
“Hercules Construction agrees to indemnify the University for any injuries or property damage arising from the performance of this agreement.”  This provision is acceptable (and even desirable) — the University can ask another party to agree to indemnify it in case of loss or injury caused by the other party.

 
“The University agrees that, in case of faulty performance of the product, the University’s sole recourse is cancellation of this agreement and the return of any fees paid to date.”  This provision is NOT acceptable — it is a limitation on another party’s liability and, thus, limits the University’s rights against that party.  

 

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