Manatt's Tom Muller, co-chair of the firm's Real Estate and Land Use practice, spoke with GlobeSt.com for a Q&A-style article on the effects of adding an indemnity on top of standard contract remedies.
Muller told the publication that many real estate agreements-particularly loan documents-contain language whereby one party agrees to 'indemnify' the other party. "These provisions are increasingly sprinkled throughout agreements without, I believe, enough consideration of their effect," he said.
A typical provision might state that "Borrower hereby agrees to indemnify and hold harmless Lender from and against all losses, costs, claims, liabilities, fines, penalties and expenses, including reasonably attorneys' and experts' fees and expenses, in any way arising out of or related to the Loan."
Muller explained the difference between what the provision actually means and what it should mean.