Indemnity
Written by Christopher Krassnig - Founder - Kairos Exchange and ZenoX Media.
Published
- Checks in every memo8
- Automatic on day one3 of 8
- Read by handad spend and processor payouts
- Tracked ecom salesEUR 200M+ZenoX ad-management figures, not Kairos deal volume - Kairos hasn't closed a deal yet.
Indemnity is the seller's contractual promise to compensate the buyer if a specific promise in the purchase agreement turns out to be false. It is the mechanism that gives reps and warranties teeth: a breach becomes a payment claim, not just a broken promise. On a smaller online-store deal it is often satisfied out of the price already held back in escrow, rather than chased through a lawsuit.
Where the Money Actually Comes From
Two structures do the real work on an online-store deal. A holdback sets aside part of the price in escrow specifically to fund a claim like this, so the buyer is not chasing a seller who has already spent the money and moved on. A cap, usually a share of the purchase price, limits how much any single claim or the total of all claims can ever reach, so a small dispute cannot become an open-ended liability years after closing. Without either one written into the agreement, an indemnity is a promise to sue, not a promise to be paid, and the difference matters most exactly when a seller has nothing left to collect from.
Not to Be Confused With
- Reps and Warranties
- reps and warranties is the seller's stated fact; indemnity is the buyer's contractual right to be paid back if that fact was false. A rep with no indemnity behind it is a promise with no remedy attached.