|Why does your business need a Hold Harmless Agreement? Because, any time your California business interacts with a customer or another company, you are at risk of being sued.
For example, if your company rents bicycles and a customer who rents one is injured in a bike accident, the customer may decide to sue your company. Fortunately, the law provides ways to protect your business from such lawsuits. One protection available to you is a hold harmless agreement.
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What is a Hold Harmless Agreement?
A California hold harmless agreement is a document that asks your customer, contractor, or another business to agree not to sue you in the event that they suffer a loss related to their interaction with your company.
This agreement can be unilateral (i.e., your customer signs agreeing not to sue you) or mutual (i.e., both parties sign agreeing not to sue each other). This document can also be referred to as an indemnity agreement or release.
Who Might Use a Hold Harmless Agreement?
Having a strong hold harmless agreement is essential for most California business owners regardless of your industry or the size of your company.
Many businesses use a hold harmless agreement each time they make a sale
of their product or service to a customer, whether that customer is an individual or another company.
How Does a Hold Harmless Agreement Protect You?
The agreement protects you by keeping you out of court, saving you time and thousands of dollars in legal fees. In the example of the bike rental company, you would require customers to sign the hold harmless agreement before they could rent one of your bikes. By doing so, they agree not to sue you in the event they get hurt.
Hold harmless agreements can also be used when transacting business with another California company; in this case, the company agrees not to sue you if they are sued by a third party for damages related to your company’s goods or services.
In order for a hold harmless agreement to work, you have to be sure that it gets signed before the business transaction takes place. You also have to include the right wording, such as a statement that the person renting your company’s bikes understands the risks of riding a bike.
The attorneys who draft our agreements are knowledgeable about the necessary provisions that will help ensure the agreement’s effectiveness.
Good business owners know that they have to prepare for the worst, even as they hope for the best. Our hold harmless agreements are a smart, convenient way to protect your company in the event of a lawsuit. Licensed California attorneys draft our hold harmless agreements and update them at least once
a year based on the latest legislative changes and case law.
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