Liability & Indemnification Terms
Overview
This document provides standardized liability and indemnification terms that Store.icu partners can incorporate into their service agreements with clients. These provisions are designed to allocate risk fairly while protecting both parties from unreasonable liability exposure in ecommerce implementation projects.
IMPORTANT: These provisions should be reviewed by legal counsel before incorporation into your agreements. They may need to be adapted based on your specific services, client relationship, jurisdiction, and risk tolerance.
Recommended Liability Provisions
1. Limitation of Liability
LIMITATION OF LIABILITY
1.1 Direct Damages Cap. Except as otherwise provided in Section 1.4 (Exclusions from Limitations), the total cumulative liability of [PARTNER_NAME] to Client for any and all claims, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to this Agreement, whether in contract, tort, strict liability, or otherwise, shall not exceed [SELECT ONE OPTION]:
[OPTION A: TOTAL FEES PAID] the total amount of fees paid by Client to [PARTNER_NAME] under this Agreement during the [12/6/3] month period immediately preceding the event giving rise to liability.
[OPTION B: SPECIFIC MONETARY CAP] [AMOUNT] ([AMOUNT_IN_WORDS] [CURRENCY]).
[OPTION C: FEES MULTIPLIER] [X] times the total amount of fees paid by Client to [PARTNER_NAME] under this Agreement during the [12/6/3] month period immediately preceding the event giving rise to liability.
1.2 Exclusion of Indirect Damages. Except as otherwise provided in Section 1.4 (Exclusions from Limitations), neither Party shall be liable to the other Party for any indirect, incidental, consequential, special, exemplary, or punitive damages, including but not limited to lost profits, lost revenue, lost business opportunities, loss of use, loss of data, or cost of procurement of substitute goods or services, whether arising out of contract, tort, strict liability, or otherwise, even if such Party has been advised of the possibility of such damages.
1.3 Allocation of Risk. The Parties acknowledge that the limitations of liability set forth in this Section reflect an allocation of risk between the Parties and form an essential basis of the bargain between them. The Parties acknowledge that the fees charged by [PARTNER_NAME] under this Agreement reflect these limitations, and that without these limitations, [PARTNER_NAME] would have charged substantially higher fees.
1.4 Exclusions from Limitations. Nothing in this Agreement shall limit or exclude either Party's liability for:
(a) death or personal injury caused by its negligence or that of its employees, agents, or subcontractors;
(b) fraud or fraudulent misrepresentation;
(c) breach of the confidentiality obligations set forth in this Agreement;
(d) Client's payment obligations under this Agreement;
(e) [PARTNER_NAME]'s indemnification obligations under Section 2.1 (Partner Indemnification) of this Agreement;
(f) Client's indemnification obligations under Section 2.2 (Client Indemnification) of this Agreement; or
(g) any other liability that cannot be limited or excluded by applicable law.
1.5 Third-Party Services. [PARTNER_NAME] shall not be liable for any failure, defect, or non-conformity in any third-party software, hardware, services, or platforms, including but not limited to the Store.icu platform, payment processors, shipping providers, or any third-party integrations requested by Client.
1.6 Force Majeure. Neither Party shall be liable for any delay or failure to perform its obligations under this Agreement due to causes beyond its reasonable control, including but not limited to acts of God, natural disasters, war, terrorism, riots, civil unrest, government action, strikes, lockouts, labor disputes, fire, explosion, pandemic, epidemic, or internet or communication failures.
2. Warranty and Disclaimer
WARRANTY AND DISCLAIMER
2.1 Limited Warranty. [PARTNER_NAME] warrants that:
(a) it has the right, power, and authority to enter into this Agreement and to perform its obligations hereunder;
(b) the services will be performed in a professional and workmanlike manner in accordance with generally accepted industry standards; and
(c) to [PARTNER_NAME]'s knowledge, the deliverables provided by [PARTNER_NAME] will not infringe upon or violate any third-party intellectual property rights.
2.2 Remedy for Breach of Warranty. As Client's exclusive remedy and [PARTNER_NAME]'s sole obligation for breach of the warranty set forth in Section 2.1(b), [PARTNER_NAME] shall, at its option: (i) re-perform the non-conforming services at no additional charge to Client; or (ii) if re-performance is not commercially reasonable, refund to Client the fees paid for the non-conforming services.
2.3 Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTION 2.1, [PARTNER_NAME] MAKES NO WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT, FITNESS FOR A PARTICULAR PURPOSE, OR ANY WARRANTIES THAT MAY ARISE FROM COURSE OF DEALING, COURSE OF PERFORMANCE, OR USAGE OF TRADE. [PARTNER_NAME] DOES NOT WARRANT THAT THE SERVICES OR DELIVERABLES WILL MEET CLIENT'S REQUIREMENTS OR EXPECTATIONS, OR THAT THE OPERATION OF ANY DELIVERABLES WILL BE UNINTERRUPTED OR ERROR-FREE. CLIENT ACKNOWLEDGES THAT [PARTNER_NAME] DOES NOT CONTROL THE TRANSFER OF DATA OVER COMMUNICATIONS FACILITIES, INCLUDING THE INTERNET, AND THAT THE SERVICES AND DELIVERABLES MAY BE SUBJECT TO LIMITATIONS, DELAYS, AND OTHER PROBLEMS INHERENT IN THE USE OF SUCH COMMUNICATIONS FACILITIES.
2.4 Third-Party Platform. CLIENT ACKNOWLEDGES THAT THE STORE.ICU PLATFORM IS PROVIDED BY A THIRD PARTY AND NOT BY [PARTNER_NAME]. [PARTNER_NAME] MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE STORE.ICU PLATFORM, INCLUDING ITS AVAILABILITY, FUNCTIONALITY, OR SECURITY. CLIENT'S USE OF THE STORE.ICU PLATFORM IS SUBJECT TO THE TERMS AND CONDITIONS OF CLIENT'S AGREEMENT WITH STORE.ICU.
3. Implementation Acceptance
IMPLEMENTATION ACCEPTANCE
3.1 Acceptance Testing. Unless otherwise specified in the Statement of Work, Client shall have [10-15] business days following [PARTNER_NAME]'s notification of completion of the implementation ("Acceptance Testing Period") to test the implementation for conformity with the specifications set forth in the Statement of Work.
3.2 Acceptance. The implementation shall be deemed accepted by Client upon the occurrence of any of the following events:
(a) Client provides written notice of acceptance;
(b) Client fails to notify [PARTNER_NAME] of any material non-conformities within the Acceptance Testing Period;
(c) Client uses the implementation in a production environment or for business purposes; or
(d) Client makes payment for the implementation without reservation.
3.3 Rejection. If Client reasonably determines that the implementation does not conform in all material respects to the specifications set forth in the Statement of Work, Client shall provide [PARTNER_NAME] with written notice specifying the alleged non-conformities in reasonable detail. [PARTNER_NAME] shall use commercially reasonable efforts to correct such non-conformities and resubmit the implementation for acceptance testing. This process shall repeat until the implementation is accepted, provided that if [PARTNER_NAME] fails to correct the non-conformities after [2-3] resubmissions, Client may terminate the applicable Statement of Work and receive a refund of fees paid for the non-conforming implementation.
3.4 Acceptance of Partial Deliverables. If the implementation is being delivered in phases or modules, Client may be required to accept each phase or module separately as specified in the Statement of Work. Acceptance of one phase or module shall not affect Client's right to reject any other phase or module that does not conform to the specifications.
Recommended Indemnification Provisions
1. Partner Indemnification
PARTNER INDEMNIFICATION
1.1 Partner Indemnification. [PARTNER_NAME] shall defend, indemnify, and hold harmless Client and its officers, directors, employees, agents, successors, and assigns from and against any and all third-party claims, actions, suits, or proceedings, and any associated losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to:
(a) any allegation that the deliverables created solely by [PARTNER_NAME] and provided to Client under this Agreement infringe or misappropriate any third-party intellectual property rights, excluding any infringement or misappropriation arising from: (i) Client's modification of the deliverables without [PARTNER_NAME]'s approval; (ii) Client's combination of the deliverables with items not provided, specified, or approved by [PARTNER_NAME]; (iii) [PARTNER_NAME]'s compliance with designs, specifications, or instructions provided by Client; or (iv) Client's continued use of the deliverables after [PARTNER_NAME] has provided modified deliverables that avoid the alleged infringement;
(b) [PARTNER_NAME]'s gross negligence or willful misconduct; or
(c) [PARTNER_NAME]'s material breach of this Agreement.
1.2 Infringement Remedies. If any deliverables provided by [PARTNER_NAME] under this Agreement are, or in [PARTNER_NAME]'s opinion are likely to be, claimed to infringe or misappropriate any third-party intellectual property rights, [PARTNER_NAME] may, at its option and expense:
(a) procure for Client the right to continue using the deliverables;
(b) replace or modify the deliverables to make them non-infringing, provided that the replacement or modification does not materially diminish the functionality of the deliverables; or
(c) if options (a) and (b) are not commercially reasonable, terminate Client's rights to use the infringing deliverables and refund a pro-rata portion of the fees paid for such deliverables based on a [36/24/12]-month straight-line depreciation from the date of delivery.
2. Client Indemnification
CLIENT INDEMNIFICATION
2.1 Client Indemnification. Client shall defend, indemnify, and hold harmless [PARTNER_NAME] and its officers, directors, employees, agents, successors, and assigns from and against any and all third-party claims, actions, suits, or proceedings, and any associated losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to:
(a) any materials, content, data, or information provided by Client for use in connection with the services or deliverables;
(b) [PARTNER_NAME]'s compliance with designs, specifications, or instructions provided by Client;
(c) any claim that Client's products or services infringe or misappropriate any third-party intellectual property rights;
(d) Client's use of the deliverables in violation of this Agreement, applicable law, or the rights of any third party;
(e) any action taken by [PARTNER_NAME] at Client's direction;
(f) Client's gross negligence or willful misconduct; or
(g) Client's material breach of this Agreement.
2.2 Client Data Responsibility. Client shall be solely responsible for the accuracy, quality, integrity, legality, reliability, appropriateness, and intellectual property ownership or right to use all Client data. [PARTNER_NAME] shall not be liable for any damage, loss, or liability arising from Client data.
3. Indemnification Procedures
INDEMNIFICATION PROCEDURES
3.1 Indemnification Procedure. The Party seeking indemnification (the "Indemnified Party") shall:
(a) promptly notify the other Party (the "Indemnifying Party") in writing of any claim, action, suit, or proceeding for which indemnification is sought, provided that the failure to give such prompt notice shall not relieve the Indemnifying Party of its indemnification obligations except to the extent that the Indemnifying Party is materially prejudiced by such failure;
(b) give the Indemnifying Party sole control over the defense and settlement of such claim, action, suit, or proceeding, provided that the Indemnifying Party shall not settle any claim, action, suit, or proceeding in a manner that adversely affects the Indemnified Party's rights or imposes any obligation or liability on the Indemnified Party without the Indemnified Party's prior written consent (which shall not be unreasonably withheld, conditioned, or delayed); and
(c) provide reasonable cooperation to the Indemnifying Party at the Indemnifying Party's expense.
3.2 Right to Participate. The Indemnified Party may participate in the defense of any claim, action, suit, or proceeding at its own expense with counsel of its own choosing, but the Indemnifying Party shall have sole control over the defense and settlement as provided in Section 3.1(b).
3.3 No Admission of Liability. Neither Party shall make any admission of liability or take any other action that could prejudice the defense or settlement of any claim, action, suit, or proceeding without the other Party's prior written consent (which shall not be unreasonably withheld, conditioned, or delayed).
Optional Additional Provisions
1. Insurance Requirements
INSURANCE REQUIREMENTS
1.1 Partner Insurance. [PARTNER_NAME] shall maintain, at its own expense, the following insurance coverage during the term of this Agreement:
(a) Commercial General Liability insurance with limits of not less than [AMOUNT] per occurrence and [AMOUNT] in the aggregate;
(b) Professional Liability (Errors and Omissions) insurance with limits of not less than [AMOUNT] per claim and [AMOUNT] in the aggregate;
(c) Cyber Liability insurance with limits of not less than [AMOUNT] per occurrence and [AMOUNT] in the aggregate;
(d) Workers' Compensation insurance as required by applicable law; and
(e) Employer's Liability insurance with limits of not less than [AMOUNT] per accident for bodily injury or disease.
1.2 Policy Requirements. All insurance policies required under this Section shall:
(a) be issued by insurance companies with an AM Best rating of at least A-VII;
(b) be primary and non-contributory with any insurance carried by Client;
(c) contain a waiver of subrogation in favor of Client; and
(d) provide that [PARTNER_NAME] will give Client at least [30] days' written notice prior to any cancellation, non-renewal, or material change in coverage.
1.3 Certificates of Insurance. Upon Client's request, [PARTNER_NAME] shall provide Client with certificates of insurance evidencing the coverage required by this Section.
1.4 No Limitation of Liability. The insurance requirements set forth in this Section shall not limit [PARTNER_NAME]'s liability under this Agreement.
2. Security Incident Response
SECURITY INCIDENT RESPONSE
2.1 Definition. "Security Incident" means any actual unauthorized access to or acquisition, use, disclosure, destruction, or alteration of Client data that is in [PARTNER_NAME]'s possession or control.
2.2 Notification. [PARTNER_NAME] shall notify Client in writing of any confirmed Security Incident without undue delay, but in no event later than [48/72] hours after [PARTNER_NAME] becomes aware of such Security Incident. Such notice shall summarize in reasonable detail the effect, if known, of the Security Incident on Client data and the corrective action taken or to be taken by [PARTNER_NAME].
2.3 Remediation. [PARTNER_NAME] shall promptly take reasonable steps to mitigate the effects of the Security Incident and to prevent any further Security Incident.
2.4 Cooperation. [PARTNER_NAME] shall reasonably cooperate with Client in Client's investigation of the Security Incident, including providing information necessary for Client to notify affected individuals or regulatory authorities as required by applicable law.
2.5 Costs. [PARTNER_NAME] shall bear the costs of remediation of any Security Incident caused by [PARTNER_NAME]'s failure to comply with its security obligations under this Agreement. Client shall bear the costs of remediation of any Security Incident caused by Client's failure to comply with its security obligations under this Agreement.
2.6 No Admission. [PARTNER_NAME]'s notification of or response to a Security Incident shall not be construed as an admission by [PARTNER_NAME] of any fault or liability.
3. Data Processing Liability
DATA PROCESSING LIABILITY
3.1 Data Protection Laws. Each Party shall comply with all applicable data protection laws and regulations in connection with its performance of this Agreement.
3.2 Data Processing Terms. To the extent that [PARTNER_NAME] processes any personal data (as defined by applicable data protection laws) on behalf of Client, the Parties shall enter into a separate data processing agreement that sets forth their respective rights and obligations with respect to such processing.
3.3 Client Obligations. Client shall ensure that it has the right to transfer personal data to [PARTNER_NAME] for processing in accordance with this Agreement and shall obtain all necessary consents and provide all necessary notices to data subjects as required by applicable data protection laws.
3.4 Partner Obligations. [PARTNER_NAME] shall:
(a) process personal data only in accordance with Client's documented instructions;
(b) ensure that persons authorized to process personal data have committed themselves to confidentiality;
(c) implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk of processing;
(d) assist Client in responding to requests from data subjects and in ensuring compliance with Client's obligations under applicable data protection laws;
(e) at Client's option, delete or return all personal data to Client after the end of the provision of services; and
(f) make available to Client all information necessary to demonstrate compliance with this Section.
3.5 Liability Allocation for GDPR Fines. Notwithstanding anything to the contrary in this Agreement, each Party shall be liable for any administrative fines imposed on it by a supervisory authority pursuant to the General Data Protection Regulation (GDPR) or other applicable data protection laws.
Implementation Guidelines
1. How to Use These Provisions
Consultation with Legal Counsel: These provisions are templates and should be reviewed by your legal counsel before incorporation into your agreements.
Integration with Master Services Agreement: These liability and indemnification terms should be incorporated into your Master Services Agreement (MSA) or your standard Terms and Conditions.
Customization: Replace all placeholders (e.g., [PARTNER_NAME], [AMOUNT]) with appropriate information specific to your business and client relationship.
Jurisdiction Considerations: These provisions are drafted with common law jurisdictions in mind. If you operate in a civil law jurisdiction, additional modifications may be necessary.
Option Selection: Where multiple options are provided (e.g., [OPTION A], [OPTION B]), select the most appropriate option for your specific circumstances and delete the others.
2. Key Considerations for Customization
Limitation of Liability Options
When determining the appropriate liability cap, consider:
Option A (Total Fees Paid): Most common approach, limiting liability to the amount the client has paid.
- Advantages: Directly proportional to project value; easy to calculate.
- Best for: Most standard implementation projects.
Option B (Specific Monetary Cap): Sets a fixed dollar amount as the maximum liability.
- Advantages: Provides certainty regardless of project size.
- Best for: Partners with strong bargaining power; very large projects where fee-based cap would be excessive.
Option C (Fees Multiplier): Limits liability to a multiple of fees paid.
- Advantages: Balances project value with additional protection.
- Best for: High-risk implementations; projects with significant business impact.
Insurance Requirements
When determining appropriate insurance coverage levels:
- Company Size: Larger partners should typically carry higher insurance limits.
- Client Size/Industry: Enterprise clients or those in regulated industries often require higher limits.
- Project Value: Higher-value projects justify higher insurance requirements.
- Risk Profile: Consider the potential impact of project failure when setting limits.
Common insurance limits for ecommerce implementation partners:
- Small partners: $1M-$2M per occurrence
- Medium partners: $2M-$5M per occurrence
- Large partners: $5M+ per occurrence
Acceptance Testing Period
The appropriate acceptance testing period depends on:
- Implementation Complexity: More complex implementations warrant longer testing periods.
- Client Resources: Clients with limited technical resources may need more time.
- Project Timeline: Consider the overall project timeline when setting this period.
Typical ranges:
- Simple implementations: 5-10 business days
- Moderate implementations: 10-15 business days
- Complex implementations: 15-20 business days
3. Industry-Specific Considerations
Retail & Fashion
For retail and fashion clients, consider:
- Additional indemnification for product compliance issues
- Specific provisions addressing seasonal business impacts
- Security incident language focusing on payment and customer data
B2B Commerce
For B2B implementation projects, consider:
- Higher liability caps reflecting larger transaction values
- Additional provisions for ERP integration failures
- Specific language addressing business continuity requirements
Subscription-Based Businesses
For subscription or recurring revenue clients, consider:
- Provisions addressing recurring revenue impacts
- Specific performance guarantees for subscription processing
- Enhanced data protection provisions
4. Common Negotiation Points
Be prepared to negotiate these common client requests:
Mutual Indemnification: Clients often request that all indemnification provisions be mutual.
Higher Liability Caps: Enterprise clients may push for higher liability caps or uncapped liability for certain breaches.
Consequential Damages: Some clients may resist the exclusion of consequential damages.
Security Requirements: Clients with strict security policies may require additional or more stringent security provisions.
Insurance Requirements: Clients may request to be added as additional insureds on your policies.
Recommended compromise positions:
- Agree to mutual indemnification with appropriate carve-outs
- Consider higher caps for specific critical breaches rather than removing caps entirely
- Maintain consequential damage exclusions but consider limited exceptions
- Accept reasonable security requirements that align with your existing practices
- Allow clients to be named as additional insureds where appropriate
Conclusion
These liability and indemnification provisions are designed to provide a balanced framework for risk allocation between Store.icu implementation partners and their clients. When properly customized and incorporated into your agreements, they can help protect your business while maintaining fair and reasonable terms for your clients.
Remember that these provisions should evolve with your business and the changing legal landscape. Regular review and updates, in consultation with legal counsel, are recommended to ensure ongoing protection.
Last Updated: May 1, 2025
This document is provided for informational purposes only and does not constitute legal advice. Partners should consult with qualified legal counsel regarding their specific circumstances.