An IP indemnification clause under which the vendor: Which term in the vendor agreement most directly protects

IP indemnification shifts the cost of third-party infringement claims from the outputs onto the vendor.

The question

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1. A confidentiality clause under which each party safeguards the other's non-public information disclosed throughout the engagement period.

   Almost right but off-target: confidentiality protects secret information, not the company against third-party IP infringement claims.
2. An uptime service-level clause under which the vendor guarantees a minimum availability and pays credits when it falls short.

   Plausible but wrong: an SLA governs availability and performance, unrelated to liability for infringing outputs.
3. A termination-for-convenience clause under which either party may end the agreement on notice without showing cause.

   Plausible but wrong: exit rights let the company leave the contract but do not cover infringement claims already incurred.
4. An IP indemnification clause under which the vendor defends and covers the company against third-party infringement claims from outputs. ✓

   Correct: an IP indemnification clause is the term that shifts the cost of third-party infringement claims arising from outputs to the vendor.

How to remember it

IP indemnification shifts the cost of third-party infringement claims from the outputs onto the vendor.

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