Signing on the Dotted Line: Indemnities and Warranties

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Signing on the Dotted Line: Indemnities and Warranties

Turning indemnity “legalese” into legal ease for designers and artists

Indemnity.

For many creatives, it is one of those words that appears in a contract, makes your eyes glaze over and quietly pushes you towards just signing and hoping for the best. At DesignWise Legal, powered by Sharon Givoni, our whole mission is to turn legalese into legal ease. This blog takes that strange word “indemnity” out of the shadows and puts it alongside its less-scary cousin, the “warranty”, so designers and artists can understand what they are actually agreeing to before they pick up the pen.

Imagine you’ve just landed a dream project. A fashion label wants to license your pattern for a limited-edition range. They send a contract filled with exciting things – fee, usage, timelines – and then a dense paragraph headed “Warranties and Indemnities”. You know your design is yours. You want the deal. But what is the real difference between promising that your work is original and indemnifying the brand if something goes wrong? That difference matters more than it looks.

A warranty is, in simple terms, a promise about the state of affairs. When you warrant that your illustration is original, you are saying “as far as I know, this is my own work and I haven’t copied anyone”. If that turns out to be wrong, you may have breached the contract, but the other party still has to show what loss they suffered and why you should pay for it. Warranties are serious, but they usually sit within the normal rules about proving damage and causation.

An indemnity, by contrast, is more like saying “if this particular type of problem arises, I’ll reimburse you, no questions asked”. In design contracts, the wording often says you indemnify the client for “all loss, damage, costs and expenses (including legal fees) arising from any claim that the work infringes third-party rights”. On the page it looks like one more standard clause; in practice it can shift a huge amount of financial risk from your client to you, even if you have done nothing wrong intentionally.

Consider a simple scenario. You create a logo for a start-up. Years later, a larger company claims that the logo is too similar to one they have been using and alleges trade mark infringement. They sue the start-up. The start-up hires lawyers, fights the claim, then settles. Because you signed an indemnity, the start-up turns around and says: “Under this clause, you must reimburse what we spent defending and settling this.” Whether or not you had ever seen the other company’s logo, the indemnity may still bite because it was triggered by the fact of a claim and the costs that followed.

Another everyday example involves changes to your work. Say you license a pattern to a homewares company. You provide a clean design. The company later remixes it, combines it with other elements and uses it on an entire product range. A third party alleges that the final combined design is too close to their artwork and demands compensation. If your contract contains a broad indemnity that covers “any use of the work by the client”, you may find yourself being asked to underwrite the fallout from choices you never controlled.

These stories are not there to frighten you away from collaborations; they are there to highlight why understanding the wording matters. In a well-balanced contract, indemnities and warranties can make commercial sense. The real questions for a creative are about scope, control and proportion. Are you indemnifying the client only for claims that your original work infringes someone else’s rights, or for anything that happens to involve your work in some way? Are you responsible even if the client has heavily modified the piece or used it outside the agreed context? Is your potential liability capped, or is it theoretically unlimited?

Designers often ask whether they should simply cross out every indemnity. There is no one-size-fits-all answer. In some projects, especially with reputable clients and genuinely original work, a narrowly drafted indemnity might be a reasonable commercial trade-off. In others, particularly where the client’s use is broad, international and long-term, or where the fee is modest, signing an unlimited indemnity might expose you to more risk than is sensible for a sole trader or small studio. The point is not that indemnities are “bad”, but that they deserve a moment of genuine thought rather than a shrug.

Warranties also deserve attention. When you warrant that your work is original, are you doing so in absolute terms, or only “to the best of your knowledge”? Are you warranting that no one will ever raise a claim, or simply that you have not knowingly copied? Are you promising that you own every font, stock image or texture in the file, or have the correct licences? These details have direct consequences for how comfortable you should feel when you sign.

At DesignWise Legal, powered by Sharon Givoni Consulting, we see many creatives who only discover the difference between indemnities and warranties when a client asks them to “just sign our standard terms”.

They understandably do not want to jeopardise the relationship, but they also do not want to put their personal finances on the line. The good news is that there is often room to discuss the wording. Sometimes that means limiting the indemnity to genuine copyright or trade mark infringement in the original work. Sometimes it means excluding losses caused by the client’s modifications or use outside the agreed scope. In some cases, it may involve capping your total liability to a multiple of your fee so you are not betting your house on a single job.

If you are a designer or artist facing a new contract, it can help to pause and walk yourself through ten practical checkpoints. Ask whether you really understand the promises you are making. Think about how the client might use or adapt your work over time.

Consider whether the fee reflects the level of risk you are being asked to accept. Reflect on how you would cope financially if the worst-case scenario occurred. Look at whether the contract requires the client to tell you about any claims and involve you in decisions. Notice whether the indemnity is tightly focused or written in sweeping language. Ask yourself whether your insurance, if you have it, would respond to the kinds of claims described. Think about the difference between an honest mistake and an unforeseeable allegation. Ask what will happen if the client settles a claim without talking to you. And finally, consider whether it might be worth having a specialist look at the wording before you commit.

The whole point of DesignWise Legal, powered by Sharon Givoni Consulting, is to help creatives navigate these issues without losing the joy of their work. You do not need to become a lawyer, and you certainly do not need to untangle indemnity clauses on your own. If you have a contract in front of you and the indemnity or warranty wording makes your stomach flip, that’s usually the moment to get tailored advice. Our firm, Sharon Givoni Consulting, can translate the clause into plain English, explain what it means for your specific project and suggest practical changes that respect both your creative contribution and your client’s need for comfort.

Indemnity might be legalese, but with the right guidance it can be turned into genuine legal ease – a clear understanding of what you are saying yes to, and the confidence that your contracts support your creative career instead of putting it at risk.

Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.