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Yup. GlobeCorp is trying to transfer risk to startup.com. So they push these types of clauses. The reality is that startup.com can't manage that level of risk

• dublinclontarf 10y ago
  What risk? If it's litigation risk pushing it onto startup.com now gets GloboCorp off the hook. startup.com goes out of busiiness, GloboCorp is fine. If it's risk of simple failure then maybe.
  • jasode 10y ago
    >If it's litigation risk pushing it onto startup.com now gets GloboCorp off the hook. That's not how indemnity works. If Apple sells a Macbook with a flawed battery that explodes in consumers' laps, the plaintiffs will sue _Apple_ and not the outsourced Chinese battery factory. Just because the Chinese company agrees to an indemnity clause, it doesn't prevent lawyers for the plaintiffs to name Apple as the defendant on the lawsuit. Indemnity is about monetary compensation from the other party and not some type of shield against lawsuits. That means that Chinese company compensates Apple's cost of lawyers and losses to pay judgments and settlements. To grandparent poster's point, if Chinese battery company goes out of business, the indemnity clause means nothing since Apple was unable to receive reimbursement from that manufacturer.