Module 4 · Chapter 9

Warranties, Liability Caps and Indemnities

What the software company promises about its app, who covers which claims, and the most each side can ever be made to pay when something goes wrong.

≈ 9 min read 8-question test

In this chapter

  • What Larchpay promises about the app, and what it leaves out
  • Which claims each side covers for the other
  • How the caps work, and whom they bind

9.1Warranties, caps and indemnities in one paragraph

Payroll mistakes cost money, and someone must pay for them. Clause 12 of the Agreement says what Larchpay promises about the app. Clause 13 says which claims each side covers for the other, and the most each side can ever be made to pay.

Larchpay earns a small fee for each employee paid, so it wants a known ceiling on its risk. Tressick answers to hundreds of clients, so it wants that ceiling high enough to protect it.

Key point

Larchpay answers for the app's arithmetic, and Tressick answers for its own clients. Each side's risk has a ceiling, except for a few claims that have none.

Also in this chapter

  1. What each side promises
  2. The indemnities: who covers which claims
  3. The caps: the most each side can pay
  4. Whether the limits hold, and whom they bind
  5. Your job

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