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  • #988256
    Caddy
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    Hi,

    I run 2 businesses, one is a “Supply” business to the industry (operating for 3 years), and the other is a “Service” based business (operating for 8 years) in the same industry which install’s the “Supply” businesses products, along with other businesses that buy products from our “Supply” business.

    For the past 2 years our “Supply” business has been a very small business (only just pushing 6 figures), but recently we have had a very large company contact us about purchasing our products and marketing them as their own to sell within their stores, which will almost turn our “Supply” business into a 7 figure turnover, overnight.

    Even though i have been in business for over 8 years i have never dealt with written contracts etc..

    One of the things they are asking are – “What kind of intellectual property warranties and indemnities do you provide?”

    I have searched around for the actual meaning of this and unable to come up with an answer for them as i don’t fully understand the meaning of the question.

    The only meaning i can really find is –
    “Broadly speaking, the purpose of warranties is to reallocate risk from the purchaser (who knows very little about the target company or business) to the vendor (who will always know more about the target company or business than the purchaser), by the vendor promising that certain statements about the target company or business are true.”

    “Warranties are to make sure that certain facts are true or certain behaviors will continue for the term of the agreement. Both normally will be specified to survive the termination or expiration of the agreement. “

    So from what i can gather, it is some sort of “Agreement” regarding risk’s between the Vendor and Purchaser doing business?

    Anyone care to shed some light, or even assist in what i should be supplying in regards to their question, or even a professional that can assist in the agreements / partnership i am forming with this company?

    Thank You.

    #1166335
    Anonymous
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    Hi Caddy,

    That sounds like a good problem to have! I hope one of our resident legal experts will be able to offer you some general advice.

    In the meantime, thanks for joining the forum, and good luck with this next stage in your business development.

    All the best,
    Jayne

    #1166336
    Caddy
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    FS Concierge, post: 192640 wrote:
    Hi Caddy,

    That sounds like a good problem to have! I hope one of our resident legal experts will be able to offer you some general advice.

    In the meantime, thanks for joining the forum, and good luck with this next stage in your business development.

    All the best,
    Jayne

    Thank you,

    I am sure there will be a lot more “contract” agreements with this business deal however i wasn’t sure if it is a job for a solicitor or some other sort of business professional.

    #1166337
    JacquiPryor
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    Hi Caddy,

    I would suggest that you engage a lawyer to review and/or help draft any sort of contract/agreement you will need.

    “What kind of intellectual property warranties and indemnities do you provide?”

    Without knowing the exact nature of your product, or the further questions/correspondence shared with this large company, I would suggest that this particular question relates to one or both of the following:

    1. They wish to know that you are the owner of any intellectual property involved in the particular product you are planning to supply; and/or
    2. You are providing them assurance that by them dealing with the particular product that the product is not an infringement of someone else’s intellectual property

    So, this particular sort of ‘warranty’ would likely form one part of a final agreement with them. They are covering their own backs by wanting to make sure that by dealing with the particular product they are not at risk of any action against them for breach of other people’s intellectual property, and, the ‘indemnity’ part will be that they are wanting you, in essence, to indemnify them against that action. So, if they do get in trouble for any sort of IP breach you’ll basically cover them – be that in taking responsibility for the breach and/or cover costs that they may face because of any action.

    As mentioned, it’s a bit tricky to tell for sure without the full picture of your business/product and the proposed agreement with this company, but, I hope the above assists in understanding this particular question regarding intellectual property warranties/indemnities.

    If you’d like to send me a PM with more detail I might be able to offer further suggestions and/or can certainly put you in touch with an appropriate lawyer to provide legal advice and review or draft agreements for you.

    All the best :)

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