Indemnification clause in Service Provider Agreement
Thread poster: Cristina Lo Bianco

Cristina Lo Bianco  Identity Verified
Italy
Local time: 09:53
Member (2008)
English to Italian
+ ...
Oct 6, 2011

Hello,

I need a bit of advice about an agreement an agency proposed me.

The clause I have doubts about is:

"Indemnification. Service Provider agrees to defend, indemnify, and hold XXX harmless from and against any and all damages, liabilities, costs and expenses (including but not limited to attorneys’ fees) incurred by XXX as a result of any claim, judgment or proceeding against XXX: (a) arising out of or connected in any manner with the performance of the Service Provider or the provision to XXX of the work product hereunder; (b) by reason of any breach or alleged breach by Service Provider of this Agreement; or (c) from any alleged or actual infringement or violation by the work product delivered to XXX upon any right of any third party, including without limitation any proprietary right. XXX shall promptly notify Service Provider of any such claim, judgment or proceeding in writing, tender to Service Provider the opportunity to settle such claim, judgment or proceeding at Service Provider’s expense, and cooperate with Service Provider in settling such claim, judgment or proceeding."

I don't have any professional insurance and I'm not sure I want to sign it.
Have you ever been proposed a clause like this? If you were, would you sign it?

Thanks,
Cristina


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Michael Grant
Japan
Local time: 17:53
Japanese to English
I would be wary of such a clause... Oct 7, 2011

I am no lawyer, but I really do not like the sound of this clause, especially:
(c) from any alleged or actual infringement or violation by the work product delivered to XXX upon any right of any third party, including without limitation any proprietary right.


Seems to me it is not your job (as a translator) to have to worry about copyright infringement, etc. as they are suggesting. The agency, as the supplier of the text/book/etc., is responsible for this type of thing, not you!

From the sound of it, they could claim all sorts of bogus "damages, liabilities, costs and expenses" against you, without having to prove any of them are real! And yet if you sign/agree to this clause, then YOU could be held liable...I don't like it...not at all.

Personally, I would ask them to take it out...


MGrant


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 09:53
Member (2005)
English to Spanish
+ ...
Do not sign it Oct 7, 2011

I have had a very similar (if not the same) section with a prospective customer. I asked that the text was ammended so that the total sum of my liabilities in case of alleged or actual breach was limited to thrice the amount paid to me for the translation in question.

In my opinion, each member of the translation supply chain should bear the consequences of a breach in their corresponding proportions, since we as the translators are not the only ones who work on the texts (for instance, a badly written text translated literally is as dangerous as a correct text with an incorrect translation).

Of course they did not accept my proposal... and I did not accept to work for them. It is better to be safe than sorry.


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Phil Hand  Identity Verified
China
Local time: 16:53
Chinese to English
Calculated risk Oct 7, 2011

I sign dodgy contracts all the time. I know it's not great practice, but often there isn't an easy alternative. I asked a very big client for a decent contract that reflected actual working practices and liabilities, and they said, if we send this request into legal, it'll take months to get approved. Easier to just sign this standard service provider agreement that everyone signs.

I thought about the nature of the work I was doing for them, about my relationship with them, and about my desire to keep the work and get paid in a reasonable time, and I signed.

You might well have to make the same calculation. Ask for an amendment, and when they refuse, decide how valuable the work is to you.

Also, think about the rest of the contract. Importantly, how are any disputes to be resolved? If they were ever to chase you for liability for something stupid, if you get a hearing in a US/UK court, it would be a hassle, but not disastrous: these courts will throw out abusive contract clauses. Your chances of being bankrupted to pay for the client's mistake are minimal.

If disputes are to be resolved in a Chinese court, don't sign. And that's the limit of my experience, so you'll have to judge other jurisdictions on what you know!


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Samuel Murray  Identity Verified
Netherlands
Local time: 09:53
Member (2006)
English to Afrikaans
+ ...
@Cristina Oct 7, 2011

Cristina Lo Bianco wrote:
Service Provider agrees to defend, indemnify, and hold XXX harmless...


This clause does not mean in ordinary English what one might think it means. What it really means, is this: you agree to pay for their legal fees if they decide to consult a lawyer on any matter related to you or the work that you did for them, regardless of the outcome.

I don't have any professional insurance...


I have been told (though I may be simply repeating urban legend) that an insurance company won't sell you professional insurance if you sign clauses like the above (or doing so might invalidate your claim at the insurer). Can anyone confirm this, please?

Have you ever been proposed a clause like this? If you were, would you sign it?


I often see it. I simply cross it out and sign in the margin. I lose about 1/3 of clients that way.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 09:53
Member (2005)
English to Spanish
+ ...
Calculated risk, always a risk Oct 7, 2011

Phil Hand wrote:
I sign dodgy contracts all the time. I know it's not great practice, but often there isn't an easy alternative. I asked a very big client for a decent contract that reflected actual working practices and liabilities, and they said, if we send this request into legal, it'll take months to get approved. Easier to just sign this standard service provider agreement that everyone signs.

Well, this is indeed a risk, and a risk I would not like to enter into. I do not want to lose the work of all my life, my home and my savings, if at the end of the production the manual contains "to the right" when it should be "to the left", someone gets killed or gets severely injured, and the whole of the responsibility is attributed to me since that is what I accepted when I signed the contract, right? Then it will be too late.

Maybe driving at 150 miles per hour on a straight, smooth, empty motorway and on a modern car is a "calculated risk", but if one of your tires blows... you are gone!

With agreements, there is no thing such as calculated risk. Sign only clauses you can really accept, since what you sign will be fully exploited by a claimant!


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Cristina Lo Bianco  Identity Verified
Italy
Local time: 09:53
Member (2008)
English to Italian
+ ...
TOPIC STARTER
Injunctive Relief clause Oct 7, 2011

@Phil
I couldn't find in the agreement what court would handle disputes. I live in Italy, while the company has locations all over the world, but the address in the agreement is in Malta.


@Tomás
Tomás Cano Binder, CT wrote:
I do not want to lose the work of all my life, my home and my savings, if at the end of the production the manual contains "to the right" when it should be "to the left", someone gets killed or gets severely injured, and the whole of the responsibility is attributed to me since that is what I accepted when I signed the contract, right? !


That's more or less my fear.

Here's another clause I am worried about:

"Injunctive Relief. Service Provider agrees that breach of this Agreement may cause XXX irreparable damage for which recovery of money damages would be inadequate, and that XXX shall therefore be entitled to obtain timely injunctive relief to protect XXX's rights under this Agreement in addition to any and all remedies available at law and equity."

I'm a legal dummy, but from what I get from the web this in not about money, but about focing me to do or not do to something. I can't imagine in what scenario I could cause irreparable damage and what an injunctive relief against me would be about.

I think I'll ask them to amend the agreement. If they say no, I'll have to weight pros and cons, as Phil says, but that's not so easy: It might be a turning point in my career or it might just be another agency that puts me in its database and then never sends work.

Thanks to everybody for your advice!
Cristina


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 09:53
Member (2005)
English to Spanish
+ ...
The latter Oct 7, 2011

Cristina Lo Bianco wrote:
I think I'll ask them to amend the agreement. If they say no, I'll have to weight pros and cons, as Phil says, but that's not so easy: It might be a turning point in my career or it might just be another agency that puts me in its database and then never sends work.

Let me ask you this: has this company already accepted your rates, and these reasonable professional rates?


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Cristina Lo Bianco  Identity Verified
Italy
Local time: 09:53
Member (2008)
English to Italian
+ ...
TOPIC STARTER
Rates Oct 7, 2011

Tomás Cano Binder, CT wrote:

Cristina Lo Bianco wrote:
I think I'll ask them to amend the agreement. If they say no, I'll have to weight pros and cons, as Phil says, but that's not so easy: It might be a turning point in my career or it might just be another agency that puts me in its database and then never sends work.

Let me ask you this: has this company already accepted your rates, and these reasonable professional rates?


We had a kind of negotiation before they sent me their translation test. We agreed on a rate that is reasonable for me. It's not in the lowest end but I am sure there are professionals in this discussion who would consider it low.... Ok, I'll do my outing and say it: we agreed on 0.07 EUR/word for software and 0.065 EUR/word for documentation, brochures and so on.

Ciao,
Cristina


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 09:53
Member (2005)
English to Spanish
+ ...
A suggestion Oct 7, 2011

Cristina Lo Bianco wrote:
Tomás Cano Binder, CT wrote:
Cristina Lo Bianco wrote:
I think I'll ask them to amend the agreement. If they say no, I'll have to weight pros and cons, as Phil says, but that's not so easy: It might be a turning point in my career or it might just be another agency that puts me in its database and then never sends work.

Let me ask you this: has this company already accepted your rates, and these reasonable professional rates?

We had a kind of negotiation before they sent me their translation test. We agreed on a rate that is reasonable for me.

OK!

I really think that for a rate that can be considered rather low... you should not enter risks of the kind posed by the agreement. I would simply say that this is a no-go. There are very reasonable agencies out there who require far more reasonable NDAs and contracts.

And in any case, why would you sign a contract with a company with no real job at hand? I would not sign such a contract just to sit in their database. By all means, apart from the fact that I would not sign such a contract, I would definitely not sign a contract before an actual job is available.

They will of course say that they cannot even offer you a job without having the contract signed, in which case you can tell them to put the contract where the sun does not shine (i.e. a dustbin).


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Cristina Lo Bianco  Identity Verified
Italy
Local time: 09:53
Member (2008)
English to Italian
+ ...
TOPIC STARTER
The rates puzzle Oct 7, 2011

Tomás Cano Binder, CT wrote:

I really think that for a rate that can be considered rather low... you should not enter risks of the kind posed by the agreement. I would simply say that this is a no-go. There are very reasonable agencies out there who require far more reasonable NDAs and contracts.
.


Thank you for your advice Tomás, I'll think about it. Rates puzzle me: if you just have a look at discussions posted in the ProZ forum you will find many different opinions about what is too low and what is not. My personal solution to the puzzle is getting as high a rate as I manage while making as much experience as I can with the time I have available. Just sitting there and waiting for a better rate wouldn't add much to my CV. On the other side, it is good to know that rates can be (much?) higher.

Ciao,
Cristina


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Indemnification clause in Service Provider Agreement

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