Adobe indemnity and liability terms

How the clauses allocate risk

Indemnity decides who defends and pays if a third party brings a claim, most commonly an intellectual property claim tied to the software. Limitation of liability caps how much each party can recover if the other causes loss. Together these clauses decide your real financial exposure under the agreement, well beyond the licence fee.

The standard Adobe position protects the vendor: a narrow indemnity in your favor, a broad set of exclusions, and a liability cap set low relative to what a serious failure could cost you. The starting paper is a negotiating position, not a fixed reality.

Where the limits leave you exposed

Watch the size of the liability cap and what it is tied to, because a cap set at a fraction of annual fees can leave a real loss largely uncovered. Watch the exclusions that carve indirect and consequential loss out entirely. Watch the scope of the IP indemnity and whether it covers the way you actually deploy the software.

The gaps are deliberate. A low cap and broad exclusions mean that if something significant goes wrong, the cost lands with you rather than the vendor who controls the product.

The redlines worth pursuing

Push the liability cap up toward a multiple of fees that reflects genuine risk, and seek to lift the cap entirely for matters such as the IP indemnity, breach of confidentiality and data protection failures. Confirm the indemnity covers your real deployment, and narrow exclusions that would otherwise swallow the protection.

Not every clause moves, and the cap is often the hardest fought. Prioritize the carve outs that protect you against the losses you could not absorb, and treat the rest as secondary.

Read next

Part of the Adobe Contract Terms and Redlines series.

• Adobe Contract Terms and Redlines: What to Watch
• Key Adobe ETLA Clauses Explained
• Adobe True Up Clause Redlines

Indemnity and liability terms decide who pays when the stakes are highest, and the default paper puts that on you. If an agreement is in front of you, negotiate the cap and the carve outs now, while you still hold the leverage of an unsigned deal.