Contract problem - indemnify. Contract problem - indemnify.
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  1. #1

    Nervous Newbie


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    Feb 2011
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    Default Contract problem - indemnify.

    Hi,

    I am new to the forum so welcome everyone.
    I am working as IT contractor for "Company A". They asked me to sign data protection policy. But one of the paragraphs worries me:

    "All contractors, consultants, partners or other servants or agents of Company A must:
    - Allow data protection audits by Company A of data held on its behalf (if requested)
    - Indemnify Company A any prosecutions, claims, proceedings, actions or payments of compensation or damages, without limitation."

    I have suspicions that Company A can ask me for compensation related to damages/problems not caused by me. Can someone with more experience help me with that?

    regards
    Martin

  2. #2

    Default

    That basically says they can do that. Tell them to stop being so stupid and get the clause removed. Are you using their IT equipment or yours?

  3. #3

    Nervous Newbie


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    Quote Originally Posted by Sockpuppet View Post
    That basically says they can do that. Tell them to stop being so stupid and get the clause removed. Are you using their IT equipment or yours?
    Booth. I work in the client's office with access to their equipment as well as just in my office.
    Does it make any difference?

    Martin

  4. #4

    Super poster


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    Default

    Quote Originally Posted by Martin uk View Post
    They asked me to sign data protection policy. But one of the paragraphs worries me:

    "All contractors, consultants, partners or other servants or agents of Company A must:
    - Allow data protection audits by Company A of data held on its behalf (if requested)
    - Indemnify Company A any prosecutions, claims, proceedings, actions or payments of compensation or damages, without limitation."

    I have suspicions that Company A can ask me for compensation related to damages/problems not caused by me. Can someone with more experience help me with that?
    If you process personal information about people then you MUST be registered under the Data Protection Act, the law is very serious about that. However, it is most likely that you don't process people's personal information so if they ever want to audit you then you will respond that "My LTD does not hold any personal information" and that's the end of it.

    As for the unlimited indemnity, this is your company which I presume is a UK Limited company so it's limitation of liability amounts to the value of the share capital issued (probably 1 or 2 pounds). The reality is that given any sniff of a court case against your company, you could cease trading and they would get nothing...

    If you really wanted to, you could get a lawyer to argue the point about the contract but part of me says it's not worth fighting these bulltulip contract terms because they are unenforcible and/or very low risk anyway. Look at the cost of PI insurance and ask yourself how big the risk is if you can get an insurer to underwrite £1,000,000 of risk for ~ £100....

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