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## Contract Review Summary
**Parties:** Veridian Cloud, Inc. (Provider) and Larkspur Retail Group (Customer)
**Your side / value:** Customer; approximately **$48,000 annually**
**Review basis:** General commercial SaaS negotiating positions—not your organization’s playbook, which was not provided. This review is limited to §§9–11; other provisions may change the analysis.
**Overall assessment: RED — materially provider-favorable.** Provider has a very low liability cap, Customer has unlimited liability and a broad indemnity, and Provider gives no express IP infringement protection in these excerpts.
### Top three pushbacks
1. **Make liability limits mutual and increase Provider’s cap.** Three months of fees is approximately **$12,000** at a steady payment rate—and potentially less early in the term.
2. **Narrow Customer’s indemnity.** It should not cover every claim connected with ordinary use or every contractual breach.
3. **Add Provider IP infringement indemnification.** A support tool should not leave you bearing the cost of defending claims that its technology infringes someone else’s rights.
## 1. Liability — RED / Must-have
**Current language**
> “Provider's total liability arising out of this Agreement shall not exceed the fees paid by Customer in the three (3) months preceding the claim. In no event shall Provider be liable for any indirect, consequential or lost-profit damages. Customer's liability under this Agreement is not limited.”
### What to push back on
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- **Asymmetry:** Your liability is unlimited; Provider’s is tightly capped.
- **Insufficient recovery:** Approximately $12,000 may not cover migration, restoration, or incident-response costs.
- **Payment timing:** “Fees paid” in the preceding three months could yield an unexpectedly low—or potentially zero—cap if you pay annually and the payment falls outside that window.
- **One-sided damages exclusion:** Provider excludes consequential and lost-profit damages; Customer receives no corresponding protection.
**Proposed replacement**
> “Except as expressly provided below, each party’s aggregate liability arising out of or relating to this Agreement shall not exceed the greater of (a) $48,000 and (b) the fees paid or payable under this Agreement during the twelve months preceding the event giving rise to liability. Neither party shall be liable for indirect, incidental, special, consequential, exemplary or punitive damages, or lost profits. Each party’s aggregate liability for breach of confidentiality, and Provider’s aggregate liability for breach of its data protection or security obligations or its intellectual property indemnification obligations, shall instead be subject to a cap of three times the foregoing general cap. The damages exclusion shall not exclude amounts payable to third parties under an express indemnification obligation. Neither cap shall limit liability for fraud or willful misconduct, or Customer’s obligation to pay fees properly due for the Services.”
**Rationale to share:** “We need proportionate, mutual risk allocation and a cap that does not fluctuate based on invoice timing.”
**Fallback:** A mutual 12-month fee cap, with a two-times cap for confidentiality, security/data protection, and Provider IP indemnity. If Provider rejects the $48,000 floor, use **annual fees paid or payable**, not merely cash paid during a short lookback.
**Business impact:** Accepting the current clause leaves you with modest recovery for Provider failures while exposing Larkspur to potentially unlimited contractual claims. Escalate any request to retain unlimited Customer liability to legal and the business owner.
**Important:** Do not agree to a blanket exception for “all indemnification obligations” while §10 remains broad; that could undo the cap entirely.
## 2. Customer indemnity — RED / Must-have
**Current language**
> “Customer shall defend, indemnify and hold harmless Provider from any and all claims, losses and expenses arising out of or relating to Customer's use of the Services or any breach of this Agreement by Customer.”
### What to push back on
“Arising out of or relating to” ordinary use is extremely broad. The provision is not expressly limited to **third-party claims**, could reach ordinary breach disputes, and does not exclude losses caused by Provider. It also lacks defense and settlement protections.
**Proposed replacement**
> “Customer shall defend Provider against third-party claims to the extent alleging that Customer-provided content infringes a third party’s intellectual property rights or that Customer’s use of the Services in violation of applicable law caused injury to that third party, and shall indemnify Provider for damages and reasonable legal fees finally awarded, and settlements approved by Customer, in such claims. Customer shall have no obligation to the extent a claim results from Provider’s breach of this Agreement, negligence, willful misconduct, or unauthorized modification or use of Customer content. Customer’s obligations are subject to Section 9.”
Add procedures applicable to **both parties’ indemnities**:
> “The indemnified party shall promptly notify the indemnifying party of the claim; delayed notice shall relieve obligations only to the extent materially prejudiced. The indemnifying party shall control the defense with reasonably qualified counsel, and the indemnified party shall provide reasonable cooperation at the indemnifying party’s expense. No settlement may admit fault by, impose nonmonetary obligations on, or fail to fully release the indemnified party without its prior written consent, not to be unreasonably withheld.”
**Rationale to share:** “Indemnities should address defined third-party risks within each party’s control, not replace ordinary breach remedies.”
**Fallback:** If Provider insists on an indemnity for misuse, restrict it to third-party claims **directly caused by Customer’s material breach of specifically identified use restrictions**, with Provider-caused losses excluded and the general cap retained.
**Business impact:** The existing wording creates difficult-to-price exposure potentially far exceeding the annual subscription. Escalate if Provider insists on broad, uncapped use-based indemnity.
## 3. Provider IP protection — RED / Must-have
**Current language**
> “Provider makes no warranty that the Services do not infringe any third-party rights.”
**Issue:** This disclaimer, combined with the absence of a Provider indemnity in the supplied text, leaves you without an express contractual defense if someone claims the tool infringes their IP. A non-infringement warranty and an indemnity serve different purposes; prioritize the **defense, indemnity, and continuity remedies**.
**Proposed replacement**
> “Provider shall defend Customer against third-party claims alleging that the Services, as supplied by Provider and used as authorized under this Agreement, infringe any patent, copyright, trademark or trade secret, and shall indemnify Customer for damages and reasonable legal fees finally awarded, and settlements approved by Provider, in such claims, subject to the procedures above and Section 9. If such a claim is made or reasonably anticipated, Provider shall, at its expense, obtain the right for Customer to continue using the Services or modify or replace them without materially reducing functionality. If neither remedy is commercially reasonable, Customer may terminate the affected Services and receive a pro rata refund of prepaid unused fees. Provider shall have no obligation to the extent a claim would not have arisen but for Customer’s unauthorized modifications or combination with items not supplied, required or authorized by Provider.”
**Rationale to share:** “Provider controls the technology and is best positioned to defend its right to supply it.”
**Fallback:** Accept a non-infringement warranty disclaimer **only if** the agreement separately provides meaningful IP defense and indemnification, reasonable exclusions, and refund/continuity remedies.
**Business impact:** Without protection, you could incur defense costs and emergency replacement costs unrelated to the $48,000 subscription price. Escalate a refusal to provide any IP indemnity.
## Negotiation strategy and next steps
Lead with these as one package: **mutual 12-month liability cap + narrow Customer indemnity + Provider IP indemnity**. Trade on the enhanced cap multiplier and warranty wording—not on unlimited Customer liability.
Before finalizing, confirm:
- Whether tickets will contain personal or sensitive information; if so, review the DPA and security obligations alongside §9.
- Whether another section makes service credits or refunds your exclusive remedy.
- Your signing deadline and any internal liability requirements.
This is legal-workflow assistance, not legal advice. Qualified legal counsel should review the proposed language and full agreement before you rely on it.