What to do next
Match the loss to a specific indemnity
Special indemnities for identified risks operate differently from the general indemnity for breach of representation - often without a basket or cap, and sometimes with a longer survival period. Identify which one you are relying on before drafting notice.
Serve notice exactly as the agreement requires
Form, addressee, method of delivery and timing are all commonly prescribed. A notice that is late, sent to the wrong person, or lacking the required particulars is routinely rejected, and the defect is usually not curable.
Follow the third-party claim procedure
Where the loss arises from a claim by someone else, the agreement usually gives the indemnifying party rights to assume or participate in the defence. Settling without following that procedure can forfeit the indemnity entirely.
Quantify with evidence, not estimates
Indemnity claims are for actual loss. Assemble invoices, tax assessments, settlement documents and professional fees, and check whether the agreement requires you to account for insurance recoveries or tax benefits.
Deal with escrow and set-off mechanics
Where an escrow exists, the release mechanism usually governs. Some agreements permit set-off against outstanding consideration - a powerful remedy where it is available, and a serious breach where it is not.
Frequently asked questions
Is an indemnity better than a damages claim?
Usually, for the buyer. It avoids arguments about foreseeability and mitigation, and special indemnities often sit outside the basket and cap. That is why they are negotiated line by line.
What if I settle the third-party claim myself?
That can forfeit the indemnity where the agreement gave the other side conduct or consent rights. Follow the procedure even when the settlement looks obviously sensible.
Do I have to reduce the claim by my insurance recovery?
Frequently yes - many agreements require loss to be calculated net of insurance and tax benefits. Check before quantifying.
Which lawyer handles this?
A commercial litigator with transactional experience. On the defence side, coordinate early with the deal team and any R&W insurer.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.