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  • Intellectual property framework

    Overview

    Protection of intellectual property rights is required by the Federal Constitution and by several multilateral treaties. The main statutes in this area are federal statutes. However, in case of litigation, some matters are subject to federal jurisdiction, and others to provincial jurisdiction.

  • Commercial contract framework

    Overview

    Commercial contracts are governed by the Civil and Commercial Code. This code came into effect in 2015 and it replaces the previous separate Civil Code and Commercial Code. It is part of the federal legislation, but jurisdiction regarding its implementation and litigation resulting thereunder corresponds primarily to the provincial courts.

    The Civil and Commercial Code includes general provisions on contracts, which are applicable to all contractual transactions. These provisions govern matters such as the formation of contracts, offer and acceptance, possible subject matter of contracts, legal formalities, the legal effects of contracts, contract termination and others.

    In addition, the Civil and Commercial Code includes provisions applicable to specific types of contracts, such as sale agreements, leases, franchise agreements and agency agreements. More than 30 types of agreements are subject to specific provisions of this kind. These specially regulated agreements are thus subject to the general rules applicable to contracts –described above – and to the special rules applicable to the relevant type of agreement. Agreements that are not subject to special rules are nevertheless valid, and they are governed primarily by the general contract rules and – to the degree possible – by the rules applicable to analogous specially regulated contracts.

    Other laws include provisions on specific types of commercial contracts. For instance, the Copyright Law includes certain provisions of contracts related to software and to publishing; the Patent Law includes rules on license agreements; and the Insurance Law includes rules on insurance contracts. However, in all these specially regulated contracts, the general contract law rules included in the Civil and Commercial Code are also applicable.

    Commercial contracts with the federal or provincial governments or with other governmental entities are also governed by administrative law. Special rules on contracts with state entities have been included in federal or provincial laws, or have been developed by case law.

  • Copyrights

    Nature of right

    Copyright protects intellectual creations in all fields of science, art and literature. Article 1 of the Copyright Law includes a non-exhaustive list of possible intellectual works protected by copyright. These include, among others, literary and artistic works, music, architectural works and software.

    Copyright protects intellectual expressions, but not ideas. For example, the contents of a book in terms of sentences and other literary expressions are protected by copyright, but the creative idea underlying the book as a whole is not.

    Copyright results from the creation of an intellectual work. Registration is not necessary for copyright to exist, although it is necessary for the exercise of some rights by local authors. Upon creation of a protected work, copyright belongs to the original author or authors, who then may transfer their right, by contract or by the operation of certain legal rules.

    Copyright includes economic and moral rights. Economic rights consist, basically, in the exclusive right to use and exploit the protected work. The Copyright Law lists some of the elements of this exclusive right, such as the right to reproduce the relevant work, to market copies, to prepare derivative works or to have the work performed publicly.

    Moral rights include the so call "integrity right" – that is, the right to preserve the text, title and other contents of the work, even if property rights on such work have been assigned; the "paternity right," the author’s right to be named and identified as such together with the work; the "publication right," the right to decide whether the right will be published; and the "alteration right," the right to modify the work, even after it has been published. Moral rights belong to the author and they are generally non-assignable.

    Legal framework

    Copyright law is included in Law 11, 723, as amended. In addition, multiple laws and regulations govern matters such as related rights, publishers' rights and collective management societies.

    Argentina is part of the main multilateral international copyright agreements, such as the Trips Agreement, the Berne Convention and the Rome Convention. The provisions of these agreements are actively enforced by the courts.

    Duration of right

    The general rule is that copyright protection lasts for a term of seventy years, counted as of January 1 of the first year after the death of the author, as well as through the life of the author.

    In the case of work done through cooperation, the 70-year term is computed from the death of the last person who participated in the joint authorship of the work involved.

    In the case of posthumous works, the 70-year term is computed from the death of the author.

    The duration of protection of anonymous works whose copyright belongs to institutions, corporations or legal entities is 50 years from the date of publication of the work.

    Special rules on copyright duration apply to specific types of copyrightable works, such as photographs and cinematographic works.

    Ownership / licenses

    The basic rule is that ownership belongs to the author. Special rules have been developed in connection with special types of works, such as cinematographic works, derivative works and software.

    There are several types of joint ownership. It may apply to works done through cooperation, which imply a creative collaboration between different authors; to collective works, which are those created through the initiative or direction of one or more individuals, who coordinate or direct the efforts of several other individuals to achieve a joint result; and to composite works, which are the result of adding different separate works, each with a possible separate author and owner, into one final result.

    Works created by employees who have been hired for that purpose belong to the employer.

    Copyright may be subject to licenses, generally as part of broader contractual arrangements such as publishing agreements.

    Remedies for infringement

    Damages may be claimed before civil courts for all types of copyright violation. Registration of works is not necessary, except for local authors, whose rights may be suspended until registration takes place.

    It is also possible to file civil action to prevent further copyright violation, and to obtain preliminary remedies, such as injunction, in the course of civil procedures.

    Criminal remedies, particularly fines, are possible, but are not frequently applied.

  • Mask works / topographies

    Nature of right

    Mask works and topographies are not separately protected under Argentine law. They may be protected under patent law or by way of confidentiality.

    Legal framework

    Argentina has enacted no specific rules on chip protection. Although Argentina is part of the WTO and has approved the Trips Agreement, it has not yet implemented any rules on chip protection.

    The provisions on chip protection included in the Trips Agreement have not been deemed immediately applicable under Argentine law. In addition, Argentina has not ratified or implemented other multilateral treaties on chip protection, in particular the Treaty of Washington of 1989.

    Semiconductor technology, generally, and topographies, in particular, may be protected under the traditional intellectual property rules applicable to all types of technology, specially patent law and the rules on confidential information. Therefore, matters such as the duration of the relevant rights, ownership and remedies depend on the type of protection used in connection with each specific mask work or topography.

    Duration of right

    Not applicable for this jurisdiction.

    Ownership / licenses

     Not applicable for this jurisdiction.

    Remedies for infringement

    Not applicable for this jurisdiction.

  • Patents

    Nature of right

    Patents are a statutory right. The granting of patents is required by the Argentine Constitution and by different international documents, particularly the Trips Agreement. Patent rights imply an exclusive right to exploit a process or a product. The Argentine Patent Law defines the limits of these exclusive rights, on the basis of the provisions of the Trips Agreement.

    Legal framework

    Patents are governed by the Patent Law – Law 24,481, as amended. In addition, they are governed by the Trips Agreement and by the Paris Convention. Argentina is not a party to the Patent Cooperation Treaty.

    Duration of right

    The basic rule is that patents expire 20 years after the date in which the relevant patent application was filed. Argentina uses a "first to file" system, but it also applies the priority rules derived from the Paris Convention.

    Argentine law provides special rules on compulsory licenses and on patent termination due to lack of exploitation of the patented invention. Compulsory licenses may be granted in case of non-exploitation, competition law violations or sanitary emergencies, among other cases. Patent termination may result when, after a compulsory license was granted for lack of exploitation, no exploitation of the invention takes place for two years after the license was granted.

    Ownership / licenses

    Joint ownership is permissible. The Patent Law includes provisions on the exercise of patent rights by the joint owners. In addition the Civil and Commercial Code rules on joint property apply to patents.

    The Patent law includes rules on licenses. Licenses are not exclusive, unless the parties provide otherwise. Competition law rules are applicable to restrictive clauses included in license agreements.

    Remedies for infringement

    The Patent law provides both civil and criminal law remedies for cases of infringement.

    Civil remedies include the compensation of damages and termination of the infringing activities.

    A complex system of rules for preliminary remedies in patent cases is included in the Patent law. Generally, suspension of an alleged infringer's exploitation requires a preliminary procedure, with the participation of expert witnesses.

    Criminal procedures and sanctions are rare.

  • Trademarks

    Nature of right

    A trademark may consist of one or more words, with or without conceptual content, drawings, commercial symbols, monograms, engravings, prints, seals, images, stripes, color combinations, letter and number combinations, the special graphics of letters and numbers, advertisement phrases, reliefs, and any other sign with distinctive capacity.

    A trademark is normally protected by means of its registration. However, de facto trademarks, that is those that are used but not registered, are also protected in a more limited way.

    Legal framework

    Trademarks are governed by the Trademark Law – Law 22,362, as amended.

    In addition, trademarks are protected by the rules included in Trips Agreement and in the Paris Convention.

    Duration of right

    Registered trademarks are protected for a period of ten years, from the moment of registration. Trademark registration may be renewed indefinitely.

    Registration may be cancelled for lack of use during a period of five years. In addition, renewal of registration requires proof of the trademark's prior use.

    Ownership / licenses

    Ownership is acquired by means of registration. However, use of unregistered trademarks may result in certain rights for the user.

    Trademarks may be subject to joint ownership. The Trademark Law and the Civil and Commercial Code provide the rules applicable to these joint ownership relationships.

    Trademark licenses are possible. They are valid even if they are not registered with the trademark office.

    Remedies for infringement

    The Trademark Law provides both civil and criminal law remedies for cases of infringement.

    Civil remedies include the compensation of damages and the termination of the infringing activities.

    Special preliminary remedies are applicable in cases of trademark infringement. The trademark owner may obtain an injunction against the infringer, when the trademark is registered and its violation is immediately evident.

    Criminal law remedies are rarely used in practice.

  • Trade secrets

    Nature of right

    Argentine law provides protection for trade secrets and confidential information. A complex set of rules creates rights against conduct whereby access is gained illegally to confidential information, or which implies illegal use of trade secrets or confidential information or which results in the unauthorized and harmful disclosure of confidential or secret information.

    Confidential information is characterized by the fact that it is kept in a reserved manner and that it is not generally available for technicians working in the relevant technical field. Trade secrets receive a special degree of protection, particularly under criminal law.

    Legal framework

    Confidential information is governed and protected by Law 24,766. It is also protected by the Trips Agreement and by the Paris Convention.

    In addition, multiple rules and statutes protect confidential information and trade secrets. Labor law protects the confidentiality and ownership of information used in employment relationships.

    Several criminal law rules apply to special types of violations of confidentiality. In particular, disclosure of trade secrets and unfair competition by means of the illegal use or appropriation of trade secrets are subject to criminal law penalties.

    Duration of right

    Confidential information and trade secrets is protected for as long as the relevant information is kept confidential. The degree of protection diminishes if the information ceases to be objectively a secret, due to its previous disclosure or because it has been obtained independently by other parties.

    Ownership / licenses

    Ownership results from the obtention of the information, accompanied by legal or practical measures aimed at restricting access to that information by third parties. No registration requirement is applicable.

    Joint ownership is possible.

    Trade secret or know-how licenses are common and enforceable.

    Remedies for infringement

    Argentine law provides civil and criminal law remedies for cases of trade secret infringement.

    Damages caused by these violations must be compensated. It is also possible to obtain court orders requiring termination of the violation.

    Preliminary remedies include injunctions against further exploitation or disclosure of trade secrets.

    Criminal remedies are applicable in cases of disclosure of trade secrets acquired in the course of employment and other professional relationship, as well as in cases in which the violation of the rights to confidential information or trade secrets results in unfair competition.

  • Other key IP rights

    Nature of right

    Industrial designs

    Industrial models and designs are protected by special industrial property rights. An industrial model or design consists in the forms embodied in or the aspect applied to an industrial or artisan product, which confer an ornamental character to such product.

    Exclusive rights on industrial models and designs result from registration of the relevant model or design.

    Industrial designs

    Industrial designs

    Legal framework

    Industrial designs

    Industrial models and designs are protected by Decree 6673/1963, as amended. They are also protected in accordance with the Trips Agreement and the Paris Convention.

    Duration of right

    Industrial designs

    The rights derived from the registration of an industrial model or design last for a five-year period, counted from the date of filing of the relevant application. The registration may be renewed for two successive five-year period, if the owner requests such renewal.

    Ownership / licenses

    Industrial designs

    Ownership belongs to the author. There is a rebuttable presumption to the effect that the first applicant of an industrial model or design registration is the author of such industrial model or design. Joint ownership is possible, and is governed by the Civil and Commercial Code and by Decree 6673/1963 as amended.

    Industrial models or designs may be the subject matter of license agreements. No registration is necessary for the validity of these agreements.

    Remedies for infringement

    Industrial designs

    Civil and criminal law remedies are applicable in case of infringement. Civil remedies include the compensation of damages and termination of the violation.

    Preliminary injunctions and remedies are possible in accordance with general procedural rules.

    Criminal sanctions have been recently reinforced, but they are rarely applied.

  • Intellectual property in employment context

    Employees

    Special rules on employee inventions are included in the Patent Law and in the Labor Contract Law.

    There are basically three types of invention, from the perspective of employer-employee relationships. First, inventions made in technological areas for which the employee was hired as a researcher or developer belong to the employer. The employee may be entitled to a special compensation if he or she develops a patented invention which exceeds the normal scope of the employee's work. Second, inventions related to the employee's work or related to the employer's know-how or activities belong to the employee, but allow the employer to exercise an option to acquire rights over the invention. If the option is exercised, the employee is entitled to a payment reflecting the value of the invention. Third, inventions that do not fall into the two previous categories belong to the employee.

    Similar rules are applicable in the case of other types of technology or intellectual property rights. In the case of software, the law applies the “work for hire” doctrine, but allows the parties to agree to different contractual rules.

    Consultants / contractors

    The law is not explicit about the rights of consultants and contractors, who do not qualify as employees, with regard to technology and other intellectual property they develop. Generally, the parties may agree as to the rules which will apply to such rights. In the absence of a contractual framework, the technology or intellectual property generated by a consultant or contractor who was hired with the purpose of developing such items that will belong to the person paying for such work.

  • Key commercial contract considerations

    Registration of commercial agreements

    The general rule is that commercial agreements are not registered, and that their validity and effect is not subject to registration requirements. However, certain types of agreement must be registered to be effective or to have full effects against third parties. Agreements subject to registration include business association agreements, certain publishing agreements, certain chattel mortgages and certain agreements related to real estate. International transfer of technology agreements are subject to registration for tax purposes.

    Recognized language of commercial agreements

    Agreements are generally entered in Spanish. However, it is legally possible to enter agreements written in other languages. These agreements must be translated when presented in court. Spanish language may be necessary in consumer transactions.

    Country-specific issues for online content

    Argentina has ratified the WIPO conventions applicable online content and practices. However, enforcement of these conventions is weak.

    Enforceability of online/clickwrap/shrinkwrap terms

    The general rule is that acceptance of terms included in online, click wrap or shrink wrap elements is valid and effective, provided such acceptance is clearly stated and applies to terms that were known to the person giving the acceptance. However, several rules may limit the effects of agreements entered by these mechanisms, particularly consumer protection rules and rules on adhesion contracts.

    Governing law

    The basic rule is that the parties may agree as to the law that will govern their contractual rights and as to the applicable jurisdiction in case of dispute. This freedom of election is subject to several limitations. Non-Argentine law will not be enforced in Argentine courts if it  is contrary to Argentine public policy. Also, certain matters are necessarily governed by Argentine law. For example, if a business association is created in Argentina, its organization and other corporate aspects will be governed by Argentine law. Decisions made by non-Argentine courts or arbitration tribunals are enforceable in Argentina only after going through a special procedure before the Argentine courts, in the context of which the decision will only be enforced if it complies with certain rules, particularly not violating Argentine public policy. In addition, certain matters – ie, deciding the validity of a patent issued in Argentina – are necessarily subject to Argentine jurisdiction.

  • Key commercial contract terms

    Enforceability of warranty disclaimers

    Argentine law provides certain warranties, generally applicable to all types of contracts implying the transfer of rights. These warranties apply, in particular, to the validity of the rights being transferred and to the fitness of the goods regarding which rights are transferred.

    The general rule is that these warranties may be limited or eliminated by agreement between the parties. However, these disclaimers are totally or partially invalid in several types of cases: if the transferor had prior knowledge of the invalidity of the transferred rights or of the deficiency of the goods involved; if the transferor is a merchant and the parties waiving his or her rights are not; and if the warranty disclaimer is included in a consumer or adhesion contract.

    Enforceability of exclusions/limitations of liability indemnification

    Exclusions or limitations of liability indemnification are valid if they meet the general conditions applicable to contractual. However, they may be unenforceable in the following cases: when they extend to willful violations or defaults, or to violations or defaults resulting from gross negligence; when they are imposed in adhesion or consumer contracts; or when they result in the violation or annulment of rights that may not be removed or limited contractually.

    Indemnification

    The basic rule under Argentine law if full indemnification of economic or moral damages caused by illegal conduct, whether that conduct constitutes a contractual or a tort violation.

    The parties are free to include contractual rules as to the extent of their indemnification obligations.

    Penalty clauses and liquidated damages clauses are acceptable, but they may be limited or amended by the courts if their terms are deemed abusive.

    In the absence of contractual provisions, the indemnification's extent will depend on circumstances such as the willful or negligent nature of the violation, foreseeability of the damages caused and the comparative fault of the parties.

    Electronic signatures

    Electronic signatures are valid and effective under Argentine law. However, certain legal effects require that the signature comply with a special certification regime.

  • Key contacts
    Guillermo Cabanellas
    Guillermo Cabanellas
    Senior Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio

Key commercial contract terms

Indemnification

Argentina

The basic rule under Argentine law if full indemnification of economic or moral damages caused by illegal conduct, whether that conduct constitutes a contractual or a tort violation.

The parties are free to include contractual rules as to the extent of their indemnification obligations.

Penalty clauses and liquidated damages clauses are acceptable, but they may be limited or amended by the courts if their terms are deemed abusive.

In the absence of contractual provisions, the indemnification's extent will depend on circumstances such as the willful or negligent nature of the violation, foreseeability of the damages caused and the comparative fault of the parties.

Australia

Express indemnities are recognized and will generally be enforceable.

Caps on liability under indemnification clauses are generally enforceable but, in some circumstances, may be considered unfair and therefore unenforceable.

Austria

Express indemnities stated in contracts are, in general, permissible. Note, however, that Austrian law does not possess a concept of indemnification comparable to that in US law, but an indemnification clause would rather be interpreted as an Austrian law construct (such as liability, warranty or guarantee). Therefore, it is likely that a court would apply the same Austrian legal concepts to such limitations.

Belgium

The concept of indemnification will, in general, be interpreted in accordance with Belgian law principles (which do not define indemnification) to provide a similar effect (such as a guarantee provided to the indemnitee).

Brazil

Indemnification provisions are generally recognized and enforceable. Normally they include the obligation to defend, indemnify (pay damages) and hold harmless. Indemnification is not limited to third-party claims.

Even if the parties do not establish a contractual obligation to indemnify, there may be indemnification obligations provided by law.

As a general rule, indemnification is measured by the extent of the damage (which normally includes actual losses and lost profits).

Canada

Indemnity clauses, like other contractual clauses, will usually be enforced if negotiated between the parties. However, standard principles such as inequality of bargaining power (particularly in the case of consumer transactions), ambiguity, or manifest unfairness of the clause may make such a clause unenforceable in a particular case.

Chile

Express indemnities stated in contracts are recognized and generally respected. There are some limits legally established to the amount and indemnification clause may set forth (lesión enorme).

China

Express indemnities stated in contracts are recognized and generally respected. Courts will not usually imply an indemnity obligation in a contract.

Colombia

Express indemnities stated in agreements are recognized, respected and generally have three obligations:

  • defend
  • indemnify (pay for the damages caused) and
  • hold harmless (indemnify party does not have of any other liability arising out of the claim)

The indemnification clauses may extend to third parties.

Czech Republic

Express indemnities stated in contracts are recognized and generally respected though relevant case law is lacking.

The "promise of indemnity" set out as a contractual type in the Civil Code includes the element of indemnification (payment of damages) only. In contracts, also the other distinct obligations are often included, ie, defense and holding harmless (indemnifying party responsible for any other liability arising out of the claim) and this contractual arrangement should be considered valid and enforceable.

Caps on liability under indemnification provisions can be enforceable.

Denmark

Indemnification clauses of contracts are generally enforceable, unless they are unfair.

Finland

Indemnification clauses are usually enforceable and relatively common in B2B contracts.

France

Indemnification clauses are commonly used in French contracts, in particular where intellectual property rights are involved.

Generally, these clauses have three distinct obligations: defend, indemnify (pay damages) and hold harmless (indemnifying party responsible for any other liability arising out of the claim). Indemnification is not limited to third-party claims.

Caps on liability under indemnification provisions can be enforceable, provided that the limitation liability clause does not empty the essential obligation from its substance. Indemnification clauses are generally unenforceable against consumers, provided that such clause is not considered as unfair pursuant to consumer law provisions and does not create significant imbalance between the rights and obligations of the parties for standard, non-negotiated contracts. 

Germany

While the obligation to indemnify is generally part of the damage claim (claims by third parties as damage), parties may agree on specific indemnification provisions, eg, for breach of IP rights. Restrictions apply in general terms and conditions, for example an indemnification regardless of fault, will generally be invalid.

Hong Kong

Express indemnities stated in contracts are recognized and generally respected.

Implied indemnities may arise when one person does an act at a second person's request as well as out of the relationship of principal and agent or employer and employee. Courts will not usually imply an indemnity obligation in a contract where an express indemnity is already stated.

An indemnification provision generally provides for indemnifying (pay damages) the other party and holding the other party harmless (indemnifying party responsible for any other liability arising out of the claim). Indemnification can cover claims between parties as well as third-party claims.

Caps on liability under indemnification provisions can generally be enforceable.

Hungary

Considering that no special indemnification rules regulate commercial contracts, the general contractual rules of the Civil Code shall apply to them.

Indemnities stated in contracts are recognized and enforceable.

Indemnification provisions generally have three distinct obligations: defense, indemnify (pay damages) and hold harmless (indemnifying party responsible for any other liability arising out of the claim).

Caps on liability under indemnification provisions can be enforceable.

India

The Contract Act recognizes indemnity as a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person.

However, the Indian courts have held that an express indemnity clause may not be necessary in face of implied rights to indemnity already existing under Indian laws.

The promisee in a contract of indemnity, acting within the scope of his authority, is entitled to recover from the promisor:

  • All damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies
  • All costs which he may be compelled to pay in any such suit if, in bringing or defending it, he did not contravene any orders of the promisor; and acted as would be prudent for him to act in the absence of a contract of indemnity; or if the promisor authorized him to bring or defend the suit
  • All sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor, or was prudent to be made in the absence of a contract of indemnity or is authorized by the promisor

Indonesia

Express indemnities stated in contracts are recognized and generally respected.

Ireland

Indemnity clauses in contracts typically fall into two categories:

  • Clauses where one party agrees to indemnify the other against liability which that other may have towards him/her and
  • Clauses in which one party to the contract agrees to indemnify the other party against liability that the other party may incur towards third parties

Indemnities are generally respected and recognized. Indemnification provisions are generally enforceable unless they involve indemnification of conduct that has been declared unenforceable by statutes or the courts (such as fraud, wilful injury to persons or property and any other future or past unlawful acts) or are contrary to public policy. 

It is not unusual to see limitations and exclusions of liability applying to indemnities. In general, these will be enforceable under Irish law.

Israel

Under Israeli law, parties are free to enter into an agreement where one party will indemnify the other party for any losses or damages suffered by the indemnitee arising out of or as a result of specified events. In practice, indemnity agreements usually include indemnity carve-outs and exclusions (such as, limited duration and scope of liabilities triggering the obligation to indemnify, limitation in indemnity amount).

Indemnification for criminal fines are not enforceable in Israel as they are usually regarded as contravening public policy.

Italy

Under the general provisions of the Italian Civil Code, only the damages that are an immediate and direct result of the non-fulfillment or delay in the performance of the contractual obligation (Section 1223 of the Italian Civil Code) can be claimed by the parties.

Japan

The concept of indemnification does not exist under Japanese law. Instead, a contract party will be entitled to certain remedies upon breach of contract, such as damage claims and specific performance. Separately, damage claims are also available in tort cases.

Either in contract or in tort, if a party seeking compensation for monetary damages was also negligent, a Japanese Court may consider reducing damages under the concept of comparative negligence.

Luxembourg

Under the general provisions of the Luxembourg Civil Code, only the damages that are the immediate and direct result of the non-performance or delay in the performance of the contractual obligation (Article 1142 and following of the Luxembourg Civil Code) can be claimed by the parties.

Mexico

Federal and state civil laws set forth the provisions related to indemnification for damages and losses, which shall be and are limited to direct and immediate consequence of the act or omission that generated the indemnification.

Liquidated damages provisions may be used in agreements, provided that the amount of such liquidated damages may not be greater than the principal amount of the agreement.

Netherlands

The concept of indemnification will, in general, be interpreted in accordance with the Dutch law principles (meaning the principles of reasonableness and fairness) and is subject to freedom of contract.

New Zealand

Express indemnities are recognized and generally respected.

However, with respect to specific subject matter, for example pecuniary penalties in relation to entering into cartel provisions, an indemnity may be void. In addition, some statutes require additional formalities before an indemnity provision will be enforceable (such as pursuant to the Credit Contract and Consumer Finance Act 2003).

Norway

Indemnification clauses of contracts are generally enforceable, unless they are unfair.

Poland

It is permissible for one party to indemnify the other party against the claims of third parties. Such clauses are commonly used in contracts concerning the transfer or licensing of intellectual property rights.

In transactions, indemnification clauses are usually used for defined and already existing risks, to ensure that the indemnifying party will hold the other party harmless in the event of any third-party claims.

Portugal

Indemnification clauses in contracts are, in principle, enforceable, but may be subject to restrictions provided for in the law. It is relatively common to stipulate in commercial agreements that the indemnifying party will indemnify and hold harmless the other party against claims of third parties related to the subject matter of the agreement.

Romania

Express indemnities stated in contracts are recognized and generally respected. Such express indemnity may be censored by Romanian courts in very limited situations.

Implied indemnities are possible as well and usually include the loss actually suffered by the aggrieved party and loss of profit. In determining the extent of the indemnity, account is also taken of the costs incurred by the aggrieved party, within a reasonable limit, to avoid or limit the damage.

Express indemnities based on comparative fault are enforceable.

Caps on liability under indemnification provisions can be enforceable.

Russia

Indemnification is currently recognized as enforceable in Russia, but in limited scope, and this concept is still very new and untested.

Saudi Arabia

The enforceability of an indemnification obligation is ultimately subject to court evaluation and discretion. That said, a party is only likely to be held liable under an indemnity if found to be a direct cause of losses which have been actually incurred by the party benefiting from the indemnity. Indirect and consequential losses are unlikely to be recoverable.

Singapore

Express indemnities stated in contracts are common and enforceable and generally respected in Singapore. However, this is subject to Section 4(1) of the Singapore Unfair Contract Terms Act (Cap. 396), which clarifies that a contract cannot require a consumer to indemnify another person (whether a party to the contract or not) for liability that may be incurred by the other party for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness.

Slovak Republic

Not applicable for this jurisdiction.

South Korea

As a general rule under Korean civil law, if a contract obligates a putative indemnitor to defend any third-party claim raised against an indemnitee, the indemnitor will have a contractual duty to assume the defense.

Spain

Express indemnities stated in contracts are recognized and generally respected.

Indemnification provisions are generally enforceable unless they require indemnification of behavior that statutes or courts have held to be unenforceable (such as fraud, willful injury to person or property and other future unlawful acts).

Caps on liability under indemnification provisions can be enforceable.

Courts have the power to moderate indemnity payments agreed by the parties to a contract.

Sweden

Unless highly biased and unfair, an indemnification clause (and similar clauses under Swedish contract law) may be enforceable under Swedish law. Indemnification clauses are not uncommon in intellectual property licensing agreements.

In a business-to-consumer situation, the general principle is that the consumer's legal rights may not be limited by a trader.

Switzerland

Indemnification provisions are often used and are generally enforceable.

Taiwan

Express indemnities stated in contracts are recognized and generally respected and cap on liability under indemnification provisions can generally be enforceable – provided, however, that responsibilities/liabilities for willful misconduct or gross negligence shall not be released in advance and, if the agreed indemnification is disproportionately high, the court may reduce it to a reasonable amount.

Ukraine

Under Ukrainian laws the damages shall be reimbursed in full unless otherwise prescribed by the agreement and in certain instances by law. Pursuant to Ukrainian laws the damages include:

  • Actual damages - losses caused to the party in result of destruction or damaging of property, as well as expenses made/or need to be made by the party for restoring of its violated right
  • Loss of profit

Further, under Ukrainian law parties to an agreement may establish the amount of penalties (fine, penalty interest) to be paid in case of failure of the parties to perform certain obligations under the agreement. The amount of penalties in the agreement can be determined as a percentage of the value of unfulfilled obligations, as a fixed monetary amount, as a percentage of the value of obligations irrespective of the stage of their fulfilment or as the multiple amount to the value of goods (works, services).

However, for the breach of certain types of obligations, eg, monetary obligations, the level of penalties may not exceed a statutory determined limit. Ukrainian legislation stipulates that parties may define the amount of interest for the late payment of debts under the agreement, nevertheless the amount of penalty interest shall be calculated based on the sum of overdue debt and shall not exceed the double discount rate of the National Bank of Ukraine (NBU) effective during the period for which the penalty interest is paid. Current discount rate of the NBU is equal to 18% per annum (ie, double discount rate is 36%).

United Arab Emirates

In the UAE, a contracting party is only permitted to indemnify another contracting party for losses which are proven to have been or will be actually incurred by the other party. Successful litigants usually only recover a nominal amount in respect of their legal costs of litigation which have little bearing on their actual legal costs.

United Kingdom

Indemnities are generally enforceable as a promise to be responsible for another's loss on a pound for pound basis. In addition, depending on the drafting, indemnities may not be subject to a duty of mitigation on the party making such indemnity claim (albeit that case law is not consistent on this point).

Due to the fact that indemnities are primary obligations, they can remain valid even if the underlying transaction is set aside for any reason. This is different to the provision of a guarantee, which, as a secondary obligation, is dependent on the primary obligation existing.

An indemnity remains subject to the usual contractual principles of offer, acceptance, intention to create legal relations and consideration just like any other contractual terms.

United States

Express indemnities stated in contracts are recognized and generally respected.

Implied indemnities are based on theories of comparative indemnity or partial indemnity or comparative equitable indemnity, ie, comparative fault of the parties. Courts will not usually imply an indemnity obligation in a contract where an express indemnity is already stated.

Express indemnities based on comparative fault are enforceable.

Indemnification provisions are generally enforceable unless they require indemnification of behavior that statutes or courts have held to be unenforceable (such as fraud, willful injury to a person or property and other future unlawful acts); indemnification for past unlawful acts is enforceable.

Indemnification provisions generally have three distinct obligations: defense, indemnify (pay damages) and hold harmless (indemnifying party responsible for any other liability arising out of the claim). Indemnification is not limited to third-party claims.

Caps on liability under indemnification provisions can be enforceable.