In an ideal world, attorney and business come together as one to create a perfectly integrated contract that captures business intent in a crisp and clear manner while appropriately taking into consideration all manners of legal risk. In that ideal world, everyone is wearing beautifully tailored business casual in a muted blue-gray palette and pithy non-annoying jazz is playing in the background. In the real world, the contract process shakes down more like an ill-mannered brawl between siblings in the backseat of a small, un-airconditioned car and the world quickly devolves into Mine, Yours, and Ours set to an annoying pop song you can’t name but can’t get out of your head.
Since I practice in the real world, I deal a lot with Mine, Yours, and Ours. I’ve pared back what is Mine over the years, but I think most reasonable folks (read: attorneys) would agree that Reps and Warranties, Indemnification, Warranty, and Limitation of Liability are Mine.
That means the business can give away the MFN (bad news, friend) or up the minimum order quantities required for exclusivity (be my guest, it’s your funeral), and I will be the picture of equanimity, ruefully shaking my head a bit and offering up gentle guidance and perspective as needed. Touch my Reps and Warranties, Indemnification, Warranty, or Limitation of Liability and I’m going to shriek louder than a Greek chorus in a Sophocles tear jerker.
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So, imagine my general horror when Tim shows up in my office the day after a particularly infamous tradeshow with a partially executed agreement with questionable grease stains in the margins and, while not actually written on the back of a cocktail napkin, was probably in close enough proximity to them all night that if this were a game of horseshoes, it would count.
Smiling, Tim nudges the sad, battered thing over to me. “So I can sign this, right?”
A myriad of dizzying retorts spring to mind, including offering to perform the last rites on it, but I hold back because Tim had the good sense not to sign it. I internally applaud myself for my reputation of being scarier than I look.
I make a show of gingerly thumbing through the thing. “Has someone else in Legal looked at the Reps and Warranties, Indemnification, Warranty, and Limitation of Liability?” I already know the answer, but you still have to play it out.
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“I took care of it.”
“Can you say more about that?” That’s my preferred go-to, non-judgmental precursor to me verbally ripping your face off.
“I already negotiated everything, including the legal mumbo jumbo.”
Ah, good ol’ legal mumbo jumbo. Here’s a hot practice tip. You can pretty much gauge a business partner’s entire working personality on whether they characterize legal language as boilerplate/jargon or mumbo jumbo. The ones who call it boilerplate or jargon can generally be trusted to abide by the rules of Mine, Yours, and Ours. And I think you know where those who call it mumbo jumbo fall.
My eyes land on a section that once read “Indemnification” and is now crossed out in blue marker that reads “Not needed.” I’m pretty sure it’s Tim’s handwriting. I have to ask though. “What happened to this provision?”
“I took care of the indumbnification.”
I blink. Perhaps in my growing, all-consuming rage of a thousand harpies, I’ve misheard him. “What?”
“We don’t need indumbnification. That’s what I got you for.”
Making small movements so as not to alert Tim to any signs of impending face ripping off, I reach for an industrial-sized bottle of Tums. The tropical fruit ones, of course. Mint is for amateurs. “What do you mean by that?”’
“Indumbnification is what happens when you get hit with a fabricated lawsuit.”
I’m pretty sure he means frivolous and not fabricated, but that’s the least of Our (yes, Our) problems. I reconsider the amount of Tums I’ve shaken into my palm and double it.
“I told them we don’t need any indumbnification because that’s what we got you for. So if we get hit with a lawsuit, you can fight them in court.”
I think we can all agree that I would be perfectly justifiable in ripping Tim’s face off, right? But we’re in the real world, not the ideal world, so I know I need to try and salvage this. But I’m not quite quick enough and Tim gets in one more blow.
“So what’s your record?”
“My record?”
“What? You guys don’t keep score?” He squints at me. “How many cases have you won?”
I can’t help it. I start laughing, and it’s not one of those ones you can pass off as a cough. I have been to court exactly four times, all on pro bono cases and I’d call them all a draw. Smothering down another round of guffaws, I ask, “Is that what you think I do all day? Go to court?”
He shrugs. “Well, yeah. What else do we pay you for?”
Since I have often pondered the same indelicate question about Tim, I choose discretion over valor and opt for a subject change. “So for starters, it’s indemnification. Not indumbnification.”
Tim crosses his arms over his chest. “Well, that makes no sense. I thought it was called indumbnification because it deals with lawsuits and most lawsuits are fabricated and dumb.” (Side bar: dear reader, while I may occasionally exaggerate details for heightened comedic effect, that gem was verbatim.)
“Indemnification is a contractual right where one party is required to cover the losses of the other party under certain agreed upon circumstances.”
Tim stares at me blankly.
“Fine,” I blow out a breath. I once stooped to explaining the concept of parents, subsidiaries, and affiliates using the Kardashian family as examples. This is nothing. “Indemnification covers what happens when one side is sued and someone is expected to pay for it.” I hold up my hand. “It does not mean I go into court and fight about it. The point of indemnification is that you negotiate ahead of time who pays so you’re not fighting about it later.”
“That’s what that means?” He makes a sour face. “I don’t care about that at all.”
“That’s why it’s Mine,” I grumble. “But thanks for not signing this without running it by Legal first. I appreciate it.”
Tim grins and in one of those rare, redeeming moments of in-house practice, he says. “I know you’re just looking out for our best interests.”
I smile.
“Even if it is just a bunch of self-serving mumbo jumbo you lawyers add in for job security,” he adds.
Like I said, total redemption moment.
In the end, working together, Tim and I are able to salvage this one with the vendor and we’re generally in smooth sailing, pithy jazz Our territory. Until Tim makes a crack that now that he knows what indemnification means, he’s practically an attorney himself.
Cue the Greek chorus. Chanting a bad pop song.
Kay Thrace (not her real name) is a harried in-house counsel at a well-known company that everyone loves to hate. When not scuffing dirt on the sacrosanct line between business and the law, Kay enjoys pub trivia domination and eradicating incorrect usage of the Oxford comma. You can contact her by email at [email protected] or follow her on Twitter @KayThrace.