Warranties and indemnities are common in commercial contracts, but if not drafted carefully, they can create significant and unexpected liabilities for your business. Understanding the difference is essential for protecting your interests.Warranties are promises. Even a minor issue — like a software bug or a small product defect — can trigger a damages claim if it prevents a client from using your product or service. Warranties can seem straightforward, but the legal consequences of a breach can be costly.
Indemnities shift risk to your business. Broad or poorly worded indemnity clauses can require you to cover a client’s losses, including claims made by third parties, even if the claim is minor, disputed, or outside your control.
💡 Key takeaway: Warranties = promises; Indemnities = risk. Both should be reviewed carefully before signing any contract
At our firm, we help businesses across Australia and New Zealand navigate warranties and indemnities in commercial contracts, ensuring clauses are clear, fair, and aligned with your business goals. Getting legal advice early can prevent small contractual missteps from becoming costly problems. Protect your business by understanding your contractual obligations and managing risk effectively.
Got concerns? Take advantage of our 30 minute free consultation which you can book via our website.