Article 10

Indemnification

10.1 [Product Liability - If acting for the Buyer, depending on the nature of the goods and the marketplace, it may be desirous to have certain indemnities such as the following: Except for claims, losses or damages directly and solely resulting from or arising out of the Buyer’s active negligence, the Seller specifically agrees to defend, indemnify and hold the Buyer harmless from and against any and all product liability claims, losses or damages, whether brought as expressed or implied warranty, negligence, or strict liability actions, including the cost of defending any proceedings, resulting in whole or in part from the manufacture , purchase, sale, storage (prior to delivery as specified in paragraph * hereof), transportation, or foreseeable use of the purchased Goods.]

10.2 Patent Indemnification - The Seller shall defend any suit or proceeding brought against the Buyer and shall pay any adverse judgement entered therein so far as such suit or proceeding is based upon a claim that the use of the Purchased Goods or any part thereof manufactured by the Seller and furnished under this Agreement constitutes infringement of any patent [in the country of *] providing the Seller is promptly notified in writing and given authority, information and assistance for defense of same; and the Seller shall, at its option, procure for the Buyer the right to continue to use said Purchased Goods, or modify it so that it becomes non-infringing, or to replace the same with non-infringing equipment, or to remove said Purchased Goods and to refund the Purchase Price. The foregoing states the entire liability of the Seller with regard to patent infringement and is subject to the limitation of total liability set forth in Article *.

If you are acting for the Seller and the Purchased Goods have been custom made by the Buyer, the following should be considered:

The Buyer agrees to defend, protect, indemnify and save harmless the Seller from any loss, damage or injury arising out of a claim, suit or action at law or in equity for actual or alleged infringement because of the sale of such Purchased Goods, and to defend any such suits or actions which may be brought against the Seller.

If acting for the Seller, it is often desirable to draft a clause limiting damages.

10.3 Limitation on Damages - In the event that either Party is entitled to recover damages under this Agreement, such damages shall not include incidental damages as defined in [Section 2-710 of the Uniform Commercial Code or the United Nations Convention on Contracts for the International Sale of Goods, Article 74. Notwithstanding any other provision of this Agreement: - such claims or relief shall be limited to direct damages which at the date of the Agreement could be reasonably foreseen as a natural consequence of such circumstances; the total liability of the Seller, including its subcontractors or suppliers, on any and all claims shall not exceed the Purchase Price of the Purchased Goods or service which has given rise to the claim; except as to title and patent indemnity, any such liability shall terminate upon the expiration of the warranty period specified in Article *; and in no event shall the Seller or its subcontractors or suppliers be liable for any special, consequential, incidental, indirect or exemplary damages, including but not limited to, loss of profit or revenues, loss of use of or increased expense of operation of the Purchased Goods or any associated equipment, impairment of other goods, cost of capital or modifications to or substitutions of the Purchased Goods, facilities or services, downtime costs or other increased expense of operation, or claims of the Buyer’s customers due to added costs or losses, service interruption or failure of supply.