Amazon seller business law: common provisions to know about before signing contracts.
Amazon Sellers Lawyer talks about common provisions (specifically indemnification & limitation of liability clauses) that are extremely important to know about whenever entering into a contract with another party.
Limitation of liability contracts typically relate to direct damages.
That’s just with you and the other party you are signing the contract with.
For example, if I sell you a widget for $10, the direct damages if the widget is not up to par is $10.
Indemnification is more complicated because typically there’s a 3rd party involved.
Many of the bigger companies will try and twist those provisions into their favor.
Let’s use our widget example.. I sell you a widget for $10 as a manufacturer. You then sell it to someone else and it blows up in their face.
Now, that was my fault for selling you the widget. You just resold the widget. Why would you indemnify me? You could be on the hook for, it could be a million dollars. Now, indemnity provisions, what that says is that I would be on the hook for that claim. I would indemnify you for any possible legal claims.