When you are reselling software, it is important to protect your business by including a detailed liability and indemnity clause in your IT Reseller Agreement. If you are a reseller, you should make sure that you have a lawyer review the liability and indemnity clause of the IT Reseller Agreement to ensure that you are not unnecessarily agreeing to be liable for loss or damage. If you are the distributor, you should make sure that you make the indemnity as broad as possible.

Are you the Distributor?

If you are the distributor, you should make sure that the reseller is liable, and agrees to indemnify, hold harmless, release and discharge you in respect of any claim, action, damage, loss, cost, charge, or other expenses which you suffer, incur or are liable for as a result of the distribution of the software by the reseller. This includes, but is not limited to, any act or omission by the reseller in connection with the distribution or sale of the software, any loss, damage or injury suffered by a third party, caused by any negligence or deliberate act by the reseller performing their obligations under the agreement, or any breach by the reseller (or its employees, agents or subcontractors) of the agreement or its obligations or warranties under the agreement.

Usually the distributor will be liable for, and will agree to indemnify the reseller in respect of, any claim, action, damage, loss, cost, charge, or other expenses which the reseller suffers, incurs or is liable for as a result of any breach by the distributor (or its employees, agents or subcontractors) of the agreement or its obligations or warranties under the agreement.

The obligations under this clause will survive termination of the IT Reseller Agreement, which means that even if the IT Reseller Agreement is terminated, each party will still be liable.

General legal clauses

It is also important to include a number of general legal clauses that protect your business and assist with the smooth running of the relationship. The notice clause, for example, sets out how notice can be provided to each party.

The relationship clause is another example, and sets out the nature of the relationship e.g. that the relationship is not a partner or joint venture relationship.

The assignment clause sets out that the parties cannot assign the contract to someone else without the other party’s permission.

The further assurance clause assists, as it sets out that each party must do certain things to give effect to the agreement.

The entire agreement and understanding clause sets out that in relation to the subject matter of the agreement, all previous oral and written communications, representations, warranties or commitments are superseded by the agreement and do not affect the interpretation or meaning of the agreement and that each of the parties has made their own enquiries before entering into this agreement.

The governing law and jurisdiction clause set out the laws by which the IT Reseller Agreement is governed.

Conclusion

As a software developer or reseller, it is important that you protect your interests and ensure that your resellers can protect theirs too. The lawyers at LegalVision have extensive experience drafting IT Reseller Agreements. We can draft a thorough IT Reseller Agreement which will protect your interests. If you’re in need of legal advice, contact us on 1300 544 755 and speak with one of our experienced Client Care team about your needs.

Edith Moss

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