Contracts 101: Why You Should Be Careful with Indemnification Clauses in the Age of TCPA Class Actions

As TCPA class actions continue to be filed at a steady pace, there’s been a noticeable uptick in cases where defendants are suing their third-party marketing partners or sub-vendors over indemnification issues. This is a good reminder that you need to pay close attention to the indemnification language in every contract. A small mistake could lead to huge liabilities, especially if your contract includes overly broad language like “any and all claims.”

The Problem with “Any and All Claims”

A recent case from the First Circuit really shows how risky this kind of language can be. In Johansen v. Liberty Mut. Grp. Inc., 118 F.4th 142 (1st Cir. Sept. 24, 2024), the indemnification clause covered “any and all third-party claims, damages, liabilities, costs, and expenses … arising out of any breach of any warranty.” Id. at 149. This broad wording ended up triggering indemnification—even before any actual liability was determined. In other words, the language was so sweeping that it automatically applied to claims, including potential TCPA lawsuits, even before a court made a ruling.

Normally, indemnification would only apply if you were found liable. But this kind of “any and all” language doesn’t have that safeguard, so if a TCPA class action comes your way, you could end up paying out, even if you’re not at fault.

How to Protect Your Business

To avoid getting caught in this trap, be sure to use more specific language in your indemnification clauses. Instead of agreeing to “any and all claims,” clearly define what kind of claims will trigger indemnification. For example, focus on covering claims that are tied directly to your breach or actual liability.

When drafting contracts—especially in high-risk areas like TCPA—don’t gloss over the indemnification language. A few well-chosen words now can save you from major financial headaches down the road.