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No. 50Legal & Compliance
Also called indemnity clause, hold harmless, indemnify and defend
Who pays legal costs and damages if a third party sues over the recordings.
Watch closely
Overbroad indemnification exposes the artist to significant uninsured legal liability and royalty withholding.
An indemnification clause makes one party responsible for the other's legal costs and damages in defined situations. In recording agreements, the artist typically indemnifies the label against claims arising from the artist's representations, that the recordings are original, don't infringe third parties, and that the artist has the right to enter the deal.
Broad indemnification clauses can make the artist responsible for defending and paying for claims the label faces even if the claim is frivolous or ultimately unsuccessful. Labels sometimes withhold royalties pending indemnification claims, even for claims that are never proven.
The same clause is drafted three ways. These are the positions we see, worst first, so you can tell at a glance which one is in front of you.
The drafting language and the negotiation moves for this clause are part of the workspace.
You have read what the clause means and where the risk sits. The rest is the side-by-side of how it reads when it is against you and when it is not, plus the specific moves that get it there.