X.X.  Claim Coordination.  To receive the benefit of the other party’s obligations in this Section “Handling Claims from Others”, a party must:

  1. promptly notify the other party of the Claim, though delayed notice only reduces the other party’s obligations to the extent the delay meaningfully impairs their ability to respond or resolve the Claim;
  2. if the other party is responsible for defending the Claim, allow that party to control the Claim’s investigation, defense, and settlement, but only if the notifying party retains the right to hire its own non-controlling counsel at its own expense, and to approve in advance any settlement that would require it to admit fault or a violation of law;
  3. if the other party is responsible for defending the Claim, provide reasonable assistance, upon request, in connection with the Claim’s investigation, defense, and settlement.
  4. {"name":"coordination rights for the party not controlling the defense","addText":"The party not controlling the defense will have the rights to do a, b and c"}
Before you copy and paste
  • Should we add coordination rights for the party not controlling the defense?<endsummary>Most B2B SaaS agreements give full control of the defense and settlement to the indemnifying party, to keep things efficient and avoid mixed signals. This clause follows that approach, but the optional language adds two practical guardrails:
    • The party receiving defense can hire its own (non-controlling) lawyer, at its own expense.
    • That party must sign off in advance if a settlement would require it to admit fault or a legal violation.
    These protections are rarely controversial but are often left out to keep things short.Select this addition in the “Optional Variations” panel to add this to the clause.
  • Should we add more coordination steps?<endsummary>Most SaaS agreements (and this clause) use a standard approach to claims: the party with the defense obligation takes control, and the other party helps. That keeps things efficient and clear.But in some cases, especially in regulated industries or sensitive contexts, certain claims could trigger regulatory inquiries, reputational fallout, or public disclosures. If the non-controlling party is more exposed to those risks, it may want additional coordination rights.  These might include:
    • a right to approve public admissions or regulatory communications;
    • a right to participate in selecting the lead counsel; or
    • joint control over specific aspects of the defense.
    These custom protections are not typical in most B2B SaaS deals, but they may be worth considering in certain higher-stakes scenarios.
Why we wrote it this way
  • Why we include a claim coordination section at all<endsummary>Many “indemnification” clauses say who pays, but not what happens when a claim actually arises. That can leave both parties guessing, and potentially arguing, when a claim hits. Without coordination language, they might disagree about:
    • Who gets to choose the lawyer?
    • Who decides the litigation strategy?
    • Who has the final say on settlements?
    By spelling out these steps, the clause gives both sides a clearer roadmap. It explains who controls the defense, what conditions apply to settlements, and what kind of help the other party must provide.This will not prevent every disagreement, but it can reduce surprises and help the parties respond more quickly when a real claim comes in.
  • Why we let one party lead the defense<endsummary>Disagreements over claims often go beyond who pays. They can turn into disputes over how the claim should be handled. If both parties try to steer the defense, they may clash over strategy, timelines, or settlement decisions, especially when their interests do not fully align. This clause gives exclusive control to the party bearing the risk, which helps avoid that friction. The controlling party can respond quickly, make consistent decisions, and focus on resolution. Meanwhile, the other party can still have visibility and safeguards, such as the right to hire its own non-controlling counsel and approve in advance any settlement that would require it to admit fault or a legal violation (see Optional Variations). This structure works well for many types of claims, not just IP, because every claim involves judgment calls. The agreement should make clear who has authority to make those calls.
  • Why we define a clear scope and process instead of relying on strategic vagueness<endsummary>Many “indemnification” clauses are written in vague language. They promise protection, but often use unclear categories of claims and leave out how the parties will coordinate. That vagueness can give the party tasked with defense more room to push back or delay. If the clause is hard to interpret or apply, the party facing the claim may decide not to press for protection or may let it drop when the legal costs of enforcement outweigh the benefit. In practice, vague indemnification provisions often go unused unless the claim is large enough to justify the uncertainty and expense. But the same vagueness that makes it easier for one side to delay or dispute its obligations also makes it harder for the other to enforce them when it matters. If a real claim comes in and the clause is unclear about what is covered, the parties are more likely to argue over interpretation before they can address the substance of the claim. That adds cost, delays the response, and increases the chance of disagreement. The tradeoff is real.  We chose clarity because the “Handling Claims from Others” section covers a narrow set of claims where the parties’ incentives already support cooperation. The claims assigned to each side are ones each party is naturally positioned to lead, either because they have the relevant information or because the claim involves their own service or data. In that context, a clear roadmap makes the clause more usable, easier to negotiate, and more dependable in practice.

Optional variations
Modify text below to replace it.
Oops! Something went wrong while submitting the form.
{ "optionalVariations": { "option1" : {"name":"coordination rights", "addText": "<li>The party not controlling the defense will have the rights to do a, b and c", "afterText": "if the other party is responsible for defending the Claim, provide reasonable assistance, upon request, in connection with the Claim’s investigation, defense, and settlement.</li>", "displayedText":"Add coordination rights for the party not controlling the defense. " }}}
Definitions
  • Claim<endsummary>any demand, notice, investigation, action, suit, or proceeding.
Close Modal