Negotiating a business transaction in Minnesota requires you to weigh the pros and cons of the deal. Being mindful of specific contract terms can be highly beneficial in protecting your interests. Pay attention to the following three terms when reviewing a contract:
- Mutual waiver of subrogation
- Indemnification clause
- Damage limitations
Mutual waiver of subrogation
Agreeing to a mutual waiver of subrogation means you and a service provider agree that neither of you can recover any damages from each other’s respective insurance company if an injury or accident happens. While this may seem okay as you don’t expect anything to occur, there’s no reason to include it in a contract if you aren’t in a position to damage the property of a service provider.
If the terms of the contract ask you to defend, indemnify and hold the vendor harmless if any damages or injuries occur when they are working for you, you agree to pay what they owe and cover their legal costs. You’re also not able to sue them. Negotiating these contract terms is essential to ensure you’re protected financially.
Having this term in a contract means that the most you’re entitled to is a refund if damage or loss occurs when the vendor is working on a project for you. Protecting your best interests can be completed by ensuring that there aren’t any damage limitations, especially if it’s an expensive project. Making sure your contract is fair will be highly beneficial for both you and the other party.
You want to be aware of the above terms as you’re negotiating a contract. Failing to do so can leave you without the ability to receive compensation for damages, and the other part may even leave you liable.