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Compensation for losses clause: Copy, customize, and use instantly

Introduction

A compensation for losses clause outlines the responsibilities of one party to compensate the other for losses incurred due to specific actions, omissions, or events. It defines the conditions under which compensation is required, the types of losses covered, and any limitations on the amount of compensation. This clause ensures that the affected party is financially protected against certain types of harm or damage.

Below are templates for compensation for losses clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.

Standard compensation for losses clause

This variation applies to general compensation for losses.

[Party Name] agrees to compensate [other party] for any losses, damages, or expenses incurred as a result of [specified actions or events, e.g., breach of contract, negligence, failure to perform obligations]. The compensation will cover direct losses but will exclude any consequential or incidental damages, unless specifically outlined in this agreement.

Compensation for losses with indemnity clause

This variation applies when indemnity is part of the compensation for losses.

[Party Name] agrees to indemnify and hold harmless [other party] against any losses, claims, liabilities, damages, or expenses arising from [specified actions or events]. The indemnification will cover all reasonable legal fees and costs associated with defending against claims related to the loss, provided that [other party] notifies [Party Name] of any claims promptly.

Compensation for losses due to breach clause

This variation applies when compensation for losses is triggered by a breach.

If [Party Name] breaches any terms of this agreement, they agree to compensate [other party] for all losses, including direct, indirect, and consequential damages resulting from the breach. This compensation will not exceed [maximum amount or a specific formula for calculating losses] unless otherwise agreed.

Compensation for losses due to delay clause

This variation applies when compensation for losses is due to delays.

In the event that [Party Name] fails to deliver [goods, services, or other specified items] on time, [Party Name] agrees to compensate [other party] for all reasonable losses incurred due to the delay. Compensation will include, but is not limited to, additional costs incurred, such as expedited shipping or alternative procurement.

Compensation for losses with exclusions clause

This variation applies when certain losses are excluded from compensation.

[Party Name] agrees to compensate [other party] for losses, damages, and expenses directly caused by [specified actions or events], except in cases where the losses result from [specified exclusions, e.g., force majeure, the negligence of the affected party, or third-party actions]. No compensation will be provided for any indirect or punitive damages.

Compensation for losses with a cap clause

This variation applies when the compensation for losses is capped.

[Party Name] will compensate [other party] for losses incurred due to [specified actions or events], but the total compensation for all losses under this clause will be capped at [specified amount]. This cap does not apply in cases of willful misconduct or gross negligence.

Compensation for losses with notification requirement clause

This variation applies when the affected party must notify the other party of losses.

[Party Name] agrees to compensate [other party] for losses arising from [specified actions or events] provided that [other party] notifies [Party Name] in writing of the loss within [X] days of discovery. Failure to notify within this period may reduce or eliminate the right to compensation.

Compensation for losses with third-party claims clause

This variation applies when compensation covers third-party claims.

[Party Name] agrees to compensate [other party] for any losses, including legal expenses and third-party claims, resulting from [specified actions or events]. This includes compensation for damages awarded to third parties, provided that [Party Name] has the right to control the defense against such claims.

Compensation for losses with limitation clause

This variation applies when the compensation for losses is limited.

[Party Name] will compensate [other party] for any direct losses resulting from [specified actions or events], but compensation will be limited to the value of the contract or the actual loss incurred, whichever is less. This limitation does not apply to losses resulting from fraud, willful misconduct, or breach of confidentiality.

Compensation for losses with no obligation for indirect losses clause

This variation applies when the compensation excludes indirect losses.

[Party Name] agrees to compensate [other party] for losses directly arising from [specified actions or events]. However, [Party Name] will not be liable for any indirect, incidental, or consequential losses, including lost profits, business opportunities, or reputational damage, arising from the loss.

Compensation for losses due to regulatory fines clause

This variation applies when compensation covers regulatory fines.

If [Party Name] incurs regulatory fines or penalties as a result of actions or omissions under this agreement, [Party Name] agrees to compensate [other party] for any direct losses associated with those fines or penalties. This includes the cost of defending against regulatory actions and any related legal fees.

Compensation for losses with mitigation requirement clause

This variation applies when the affected party is required to mitigate their losses.

[Other party] agrees to take all reasonable steps to mitigate any losses incurred as a result of [specified actions or events]. [Party Name] will compensate [other party] for losses that could not have been reasonably mitigated, but will not be responsible for losses that could have been avoided with reasonable efforts.

Compensation for losses with payment terms clause

This variation applies when the compensation payment terms are specified.

[Party Name] agrees to pay [other party] compensation for losses within [X] days of receiving an invoice for such losses. The invoice will detail the losses incurred, including any supporting documentation, and payment will be made via [specified payment method].

Compensation for losses with prompt settlement clause

This variation applies when the compensation is settled promptly.

[Party Name] agrees to compensate [other party] for losses incurred within [X] days of receiving notice of the loss. The parties agree to work together in good faith to settle the compensation amount as quickly as possible, with a final settlement reached no later than [X] days.

Compensation for losses with liquidated damages clause

This variation applies when compensation is specified as liquidated damages.

In the event of [specified breach or failure], [Party Name] agrees to pay [other party] liquidated damages in the amount of [X] for each instance of loss, as predetermined by the parties. The parties acknowledge that this amount is reasonable and reflective of the anticipated loss, and this amount shall be the exclusive remedy for such losses.

Compensation for losses due to breach of confidentiality clause

This variation applies when compensation covers breaches of confidentiality.

If [Party Name] breaches the confidentiality provisions of this agreement, [Party Name] will compensate [other party] for all losses resulting from the breach, including any direct damages, legal fees, and costs associated with protecting confidential information from further disclosure.

Compensation for losses with interest clause

This variation applies when compensation includes interest on the losses.

[Party Name] agrees to compensate [other party] for losses incurred as a result of [specified actions or events] along with interest at the rate of [X]% per annum, calculated from the date the loss was incurred until the compensation is fully paid.

Compensation for losses with a timeline for disputes clause

This variation applies when disputes over compensation must be resolved within a timeline.

Any disputes regarding the compensation for losses must be submitted in writing within [X] days of the notification of loss. The parties agree to attempt to resolve any disputes through negotiation or mediation within [X] days of notification. If the dispute is not resolved, it will be settled by arbitration as per the terms of this agreement.

Compensation for losses with deductible clause

This variation applies when a deductible is applied before compensation.

[Party Name] agrees to compensate [other party] for losses, subject to a deductible of [X]. The deductible must be subtracted from the total loss amount, and the remaining balance will be compensated as outlined in this agreement.

Compensation for losses with total liability cap clause

This variation applies when the total compensation for losses is capped.

[Party Name] agrees to compensate [other party] for losses resulting from [specified actions or events], but the total amount of compensation provided under this agreement will not exceed [specified cap], regardless of the number or severity of the losses incurred.

Compensation for losses with attorney fees clause

This variation applies when compensation covers attorney fees.

[Party Name] agrees to compensate [other party] for all legal fees and attorney costs incurred as a result of [specified actions or events]. Compensation for attorney fees will be provided upon submission of detailed invoices from the legal counsel hired by [other party].

Compensation for losses with product defect clause

This variation applies when compensation is related to product defects.

[Party Name] agrees to compensate [other party] for any losses resulting from defects in the exchanged [products/services]. If the goods are found to be defective or not meeting the agreed-upon standards, [Party Name] will reimburse [other party] for the cost of the defective products, as well as any costs incurred due to the defect.

Compensation for losses with force majeure clause

This variation applies when losses are incurred due to a force majeure event.

[Party Name] will not be liable for compensation for losses resulting from a force majeure event, including but not limited to natural disasters, wars, strikes, or governmental actions. However, if the force majeure event leads to financial losses not otherwise covered, [Party Name] agrees to work with [other party] to assess and mitigate the loss.

Compensation for losses with credit default clause

This variation applies when losses are related to credit defaults.

In the event that [Party Name] defaults on its credit obligations, [Party Name] agrees to compensate [other party] for any losses incurred due to the default. This includes any missed payments, interest charges, and costs resulting from the credit default, to be paid within [X] days of notification.

Compensation for losses with punitive damages exclusion clause

This variation applies when punitive damages are excluded from compensation.

[Party Name] agrees to compensate [other party] for any direct losses or damages arising from the specified actions or events. However, [Party Name] will not be liable for punitive or exemplary damages, unless such damages are awarded due to [Party Name]’s intentional misconduct or fraud.

Compensation for losses with non-receipt of payment clause

This variation applies when compensation is due to non-receipt of payment.

If [Party Name] fails to pay [other party] as agreed in this contract, [Party Name] agrees to compensate [other party] for any losses resulting from the non-receipt of payment. Compensation will include the full outstanding payment along with any applicable interest at [X]% per month.

Compensation for losses with insurance claim clause

This variation applies when compensation includes insurance claims.

[Party Name] agrees to compensate [other party] for any losses incurred as a result of [specified event] that are covered under [Party Name]’s insurance policy. Compensation will be limited to the amount of the insurance payout received and will be provided within [X] days of receiving the insurance claim amount.

This variation applies when compensation covers employee-related damages.

[Party Name] will compensate [other party] for any losses or damages caused by the actions of its employees while performing duties under this agreement. Compensation will cover the costs of repair, replacement, or liability claims resulting from employee actions, with a maximum liability of [X].

This variation applies when compensation is due to vendor-related damages.

[Party Name] agrees to compensate [other party] for any losses resulting from damage caused by a third-party vendor. [Party Name] will seek reimbursement from the vendor if necessary and will ensure that [other party] is compensated promptly for the damages.

Compensation for losses with intellectual property infringement clause

This variation applies when compensation is needed due to intellectual property infringement.

[Party Name] agrees to compensate [other party] for losses arising from any infringement of intellectual property rights related to this agreement, including but not limited to copyright, trademark, or patent infringement. Compensation will cover any damages, legal fees, and settlement costs resulting from the infringement.

Compensation for losses with exclusion of consequential damages clause

This variation applies when compensation excludes consequential damages.

[Party Name] agrees to compensate [other party] for direct losses incurred due to [specified event or action], but will not be responsible for any consequential, incidental, or special damages. This includes damages for lost profits, business interruption, or reputational harm unless specifically agreed otherwise.

Compensation for losses with limited liability clause

This variation applies when compensation is subject to limited liability.

[Party Name] will compensate [other party] for any losses up to a maximum amount of [X]. This limitation applies regardless of the nature of the losses or the circumstances surrounding the event causing the loss.

Compensation for losses with third-party involvement clause

This variation applies when third-party involvement is involved in the compensation.

If a third party is responsible for the losses incurred, [Party Name] agrees to compensate [other party] for losses directly attributable to third-party actions. [Party Name] will also assist [other party] in pursuing claims against the responsible third party for any additional damages.

Compensation for losses with adjustment for depreciation clause

This variation applies when compensation is adjusted based on depreciation.

If the losses are related to tangible property, [Party Name] agrees to compensate [other party] for the loss of property, adjusted for depreciation over time. The compensation will reflect the current value of the property at the time of loss, considering wear and tear.

Compensation for losses with warranty breach clause

This variation applies when compensation is due to warranty breaches.

[Party Name] agrees to compensate [other party] for any losses or damages resulting from a breach of warranty related to the products or services exchanged. This includes the cost of replacing or repairing defective goods or services.

Compensation for losses with pro-rata compensation clause

This variation applies when compensation is calculated on a pro-rata basis.

If [Party Name] causes a loss to [other party], the compensation will be calculated on a pro-rata basis, reflecting the proportion of the loss caused by [Party Name] relative to the total value of the contract or project.

Compensation for losses with mitigating circumstances clause

This variation applies when compensation is adjusted for mitigating circumstances.

[Party Name] agrees to compensate [other party] for losses, but the amount may be adjusted based on mitigating circumstances, such as actions taken by [other party] to reduce or prevent further losses. The board or a third-party arbitrator will determine the adjusted amount.

Compensation for losses with shared liability clause

This variation applies when liability for losses is shared between parties.

In the event of losses arising from [specified actions], both parties agree to share responsibility for compensating those losses. The proportion of liability will be determined based on each party's contribution to the cause of the loss, as outlined in the agreement.

Compensation for losses with maximum liability cap clause

This variation applies when compensation is capped at a maximum liability amount.

[Party Name] agrees to compensate [other party] for any direct losses resulting from [specified event], but the total compensation will be capped at [specified maximum amount], regardless of the number or severity of the losses incurred.

Compensation for losses with mitigation of damages clause

This variation applies when the affected party must mitigate damages to receive compensation.

[Other party] agrees to take reasonable steps to mitigate any losses resulting from [specified event]. Failure to mitigate damages may reduce the amount of compensation to be provided by [Party Name].

Compensation for losses with dispute resolution clause

This variation applies when there is a process for resolving disputes over compensation.

Any disputes regarding the amount or validity of compensation for losses will be resolved through [mediation/arbitration], as per the dispute resolution clause in this agreement. The parties agree to work in good faith to reach a fair resolution.

Compensation for losses with evidence requirement clause

This variation applies when compensation requires supporting evidence.

[Party Name] agrees to compensate [other party] for losses, provided that [other party] submits detailed documentation, including invoices, receipts, and other relevant evidence of the loss. Compensation will only be provided after the review and approval of the submitted evidence.

Compensation for losses with reimbursement of legal expenses clause

This variation applies when legal expenses are reimbursed as part of the compensation.

In the event that [Party Name] causes losses to [other party], [Party Name] agrees to reimburse [other party] for any legal expenses incurred in pursuing compensation for the loss. This includes attorney fees, court costs, and other reasonable legal costs related to resolving the matter.

Compensation for losses with payment delay clause

This variation applies when compensation is due to payment delays.

If [Party Name] fails to make a payment within the agreed timeline, they agree to compensate [other party] for any losses incurred due to the delay, including any financial charges, additional interest, or operational costs resulting from the late payment.

Compensation for losses with termination of agreement clause

This variation applies when compensation is triggered by the termination of the agreement.

If [Party Name] terminates the agreement before its completion, they agree to compensate [other party] for any losses incurred due to early termination, including lost revenue, business opportunities, and any pre-paid expenses not recoverable by [other party].

Compensation for losses with contractual non-performance clause

This variation applies when compensation is due to non-performance under the contract.

[Party Name] agrees to compensate [other party] for losses incurred due to non-performance or partial performance under the terms of the agreement. This includes any direct costs or damages resulting from [Party Name]'s failure to perform their obligations as outlined in the contract.

Compensation for losses with asset damage clause

This variation applies when compensation is due to asset damage.

In the event that [Party Name] causes damage to [other party]’s assets, [Party Name] agrees to compensate [other party] for the cost of repairing or replacing the damaged assets, as well as any other losses directly related to the damage.

Compensation for losses with breach of confidentiality clause

This variation applies when compensation is due to a breach of confidentiality.

If [Party Name] breaches the confidentiality provisions of this agreement, they agree to compensate [other party] for all losses incurred, including any direct financial losses and reputational damage arising from the unauthorized disclosure of confidential information.

Compensation for losses with third-party liability clause

This variation applies when compensation covers third-party liability.

[Party Name] agrees to compensate [other party] for any losses, damages, or legal liabilities arising from claims brought by third parties due to actions or omissions of [Party Name] during the performance of this agreement.

Compensation for losses with mitigation efforts clause

This variation applies when compensation is reduced due to mitigation efforts.

[Party Name] agrees to compensate [other party] for losses, but the amount of compensation will be reduced if [other party] fails to make reasonable efforts to mitigate the losses, including taking reasonable steps to minimize the impact of the loss or damage.

Compensation for losses with non-recoverable costs clause

This variation applies when compensation covers non-recoverable costs.

[Party Name] agrees to compensate [other party] for non-recoverable costs resulting from [specified event or action], including costs that cannot be refunded or reimbursed through insurance or other means. The compensation will be based on the actual out-of-pocket expenses incurred by [other party].

Compensation for losses with operating losses clause

This variation applies when compensation covers operational losses.

[Party Name] agrees to compensate [other party] for any operational losses incurred as a result of [specified action, failure, or delay]. Compensation will include costs associated with business interruption, loss of efficiency, and any extra costs incurred to maintain operations.

Compensation for losses with tax liabilities clause

This variation applies when compensation includes tax-related liabilities.

[Party Name] agrees to compensate [other party] for any tax liabilities resulting from [specified action or event] that were not anticipated in the original agreement. This includes the payment of any additional taxes, penalties, or interest charges that [other party] incurs due to the event.

Compensation for losses with damaged reputation clause

This variation applies when compensation includes reputational damage.

[Party Name] agrees to compensate [other party] for any reputational damage caused by [specified action, event, or failure]. Compensation will include direct costs and damages resulting from harm to [other party]'s reputation, including public relations efforts to restore their image.

Compensation for losses with legal claim clause

This variation applies when compensation covers legal claims.

If [Party Name] is found liable for legal claims arising from [specified action or event], they agree to compensate [other party] for the cost of defending against the claim, including legal fees, settlements, and any damages awarded to the claimant.

Compensation for losses with supplier delays clause

This variation applies when compensation is due to delays caused by suppliers.

[Party Name] agrees to compensate [other party] for any losses incurred due to delays caused by [specified supplier]. This includes additional costs such as expedited shipping, alternative sourcing, or any other reasonable expenses incurred to mitigate the supplier delay.

Compensation for losses with asset depreciation clause

This variation applies when compensation accounts for asset depreciation.

In the event of asset damage or loss, the compensation for losses will be calculated based on the depreciated value of the asset at the time of the incident, rather than the original purchase price, unless otherwise agreed in writing by both parties.

Compensation for losses with security breach clause

This variation applies when compensation is triggered by a security breach.

If a security breach occurs due to [Party Name]'s failure to protect confidential or sensitive information, they agree to compensate [other party] for any losses, including legal costs, remediation expenses, and any damages caused by the breach.

Compensation for losses with worker's compensation clause

This variation applies when compensation includes worker’s compensation claims.

[Party Name] agrees to compensate [other party] for any losses resulting from worker’s compensation claims arising from the performance of this agreement, including medical expenses, lost wages, and legal costs related to such claims.

Compensation for losses with environmental damage clause

This variation applies when compensation is for environmental damage.

[Party Name] agrees to compensate [other party] for any losses incurred due to environmental damage caused by their actions, including cleanup costs, penalties, and any damages awarded in environmental lawsuits.

Compensation for losses with market value compensation clause

This variation applies when compensation is based on the market value of goods or services.

In the event of a loss involving [goods/services], [Party Name] agrees to compensate [other party] based on the market value of the lost items or services at the time the loss occurred, rather than the original purchase price.

Compensation for losses with personal injury clause

This variation applies when compensation covers personal injury.

If [Party Name] causes personal injury to [other party] or their employees, they agree to compensate [other party] for all medical expenses, pain and suffering, and other direct costs related to the injury, as well as any lost wages incurred due to the injury.

Compensation for losses with replacement of defective products clause

This variation applies when compensation is for defective products.

If the exchanged or delivered products are found to be defective, [Party Name] agrees to compensate [other party] by providing replacement products of equal value and quality. In cases where replacements are not possible, a refund for the purchase price will be issued.

Compensation for losses with coverage of administrative costs clause

This variation applies when compensation includes administrative costs.

[Party Name] agrees to compensate [other party] for administrative costs incurred due to [specified actions or failures], including but not limited to processing fees, labor costs, and any related operational expenses necessary to address the issue.

This variation applies when compensation is due to fraud.

[Party Name] agrees to compensate [other party] for any losses resulting from fraud or intentional misrepresentation by [Party Name] or its agents. Compensation will cover the amount lost due to the fraudulent actions, along with any consequential costs or damages arising from the fraud.

Compensation for losses with non-performance by subcontractors clause

This variation applies when compensation is triggered by non-performance by subcontractors.

If a subcontractor fails to meet its obligations, [Party Name] agrees to compensate [other party] for any additional costs or delays resulting from the subcontractor's non-performance, including costs of securing alternative services or products.

Compensation for losses with rental losses clause

This variation applies when compensation covers rental losses.

[Party Name] agrees to compensate [other party] for rental losses incurred due to a breach of this agreement. This includes any lost rental income or additional costs incurred due to the delay or cancellation of an agreement related to rented property.

Compensation for losses with product recall costs clause

This variation applies when compensation is for product recall costs.

In the event that [Party Name] causes a product recall, they agree to compensate [other party] for the costs incurred in the recall process, including shipping, handling, customer notifications, and any damages arising from the recall.

Compensation for losses with unfair market competition clause

This variation applies when compensation is triggered by unfair market competition.

If [Party Name] engages in unfair market competition, including misrepresentation or deceptive practices, they agree to compensate [other party] for losses, including loss of market share, reputational damage, and any legal or settlement costs resulting from the unfair practices.

Compensation for losses with equipment failure clause

This variation applies when compensation is due to equipment failure.

[Party Name] agrees to compensate [other party] for any losses incurred due to equipment failure during the performance of this agreement. This includes repair or replacement costs, as well as any resulting downtime or operational delays caused by the failure.

Compensation for losses with cancellation fees clause

This variation applies when compensation covers cancellation fees.

If [Party Name] cancels the agreement without cause, they agree to compensate [other party] for any cancellation fees and losses, including administrative costs and any prepaid amounts that are non-refundable due to the cancellation.

Compensation for losses with damage to intellectual property clause

This variation applies when compensation covers damage to intellectual property.

[Party Name] agrees to compensate [other party] for any damages or losses arising from the infringement or unauthorized use of intellectual property, including patents, trademarks, and copyrights, during the term of this agreement.

Compensation for losses with currency fluctuation clause

This variation applies when compensation is due to currency fluctuations.

[Party Name] agrees to compensate [other party] for any losses incurred as a result of currency fluctuations that impact the value of payments under this agreement, including additional costs of converting currency or dealing with international financial exchange issues.

Compensation for losses with legal enforcement clause

This variation applies when compensation covers costs for legal enforcement.

In the event that legal enforcement is necessary to recover losses or damages resulting from [Party Name]’s actions, [Party Name] agrees to compensate [other party] for all legal expenses, including attorney fees, court costs, and enforcement expenses.

Compensation for losses with extended warranty clause

This variation applies when compensation is due to an extended warranty claim.

If a product fails under its extended warranty, [Party Name] agrees to compensate [other party] for all losses incurred due to the failure, including the cost of replacement or repair, as well as any operational delays caused by the faulty product.

Compensation for losses with product return clause

This variation applies when compensation is due to returned products.

[Party Name] agrees to compensate [other party] for any losses resulting from the return of [products] due to defects, including the costs of reverse logistics, restocking fees, and any financial loss due to lost sales opportunities.

Compensation for losses with fixed penalty clause

This variation applies when compensation is capped at a fixed penalty.

In the event of non-compliance with the agreement terms, [Party Name] agrees to pay a fixed penalty of [specified amount] to [other party] as compensation for any losses or damages directly resulting from the breach.

Compensation for losses with strategic partnership failure clause

This variation applies when compensation is due to failure in a strategic partnership.

If a strategic partnership formed under this agreement fails due to [Party Name]’s actions or negligence, [Party Name] agrees to compensate [other party] for any losses, including any unrecouped investments or costs associated with the failed partnership.

Compensation for losses with infrastructure damage clause

This variation applies when compensation covers infrastructure damage.

[Party Name] agrees to compensate [other party] for any losses or damage to infrastructure caused by [specified actions or failures]. This includes physical damage to buildings, utilities, or communication systems essential to the performance of this agreement.

Compensation for losses with undisclosed liabilities clause

This variation applies when compensation is due to undisclosed liabilities.

[Party Name] agrees to compensate [other party] for any undisclosed liabilities or financial obligations that arise after the execution of this agreement. [Party Name] will bear the full cost of any liabilities that were not disclosed at the time the agreement was signed.

Compensation for losses with supply chain disruption clause

This variation applies when compensation is required for supply chain disruptions.

[Party Name] agrees to compensate [other party] for any losses incurred due to supply chain disruptions caused by [Party Name]’s failure to provide required goods or services. Compensation will include additional costs incurred due to delays, alternate sourcing, or expedited shipping.

Compensation for losses with performance bond clause

This variation applies when compensation includes a performance bond.

[Party Name] agrees to post a performance bond in the amount of [X] to guarantee the completion of the terms of this agreement. If [Party Name] fails to meet performance expectations, the bond will be used to compensate [other party] for any losses incurred due to non-performance.

Compensation for losses with warranty claims clause

This variation applies when compensation involves warranty claims.

If a warranty claim is made due to defects in goods or services provided by [Party Name], they agree to compensate [other party] for all costs related to processing the warranty claim, including the costs of repairs, replacements, and any incurred delays.

Compensation for losses with data breach clause

This variation applies when compensation covers damages from a data breach.

[Party Name] agrees to compensate [other party] for all losses resulting from a data breach caused by [Party Name], including legal fees, notification costs, identity theft protection services, and any damages arising from the breach.

Compensation for losses with performance default clause

This variation applies when compensation is triggered by performance defaults.

[Party Name] agrees to compensate [other party] for any losses resulting from a failure to meet performance standards as outlined in this agreement. Compensation will cover any financial losses and operational inefficiencies caused by non-performance.

Compensation for losses with exclusivity violation clause

This variation applies when compensation is due to violation of exclusivity terms.

If [Party Name] violates the exclusivity provisions of this agreement by engaging in transactions with competitors or offering products or services outside the agreement terms, they agree to compensate [other party] for any losses, including lost profits or market share.

Compensation for losses with adverse market conditions clause

This variation applies when compensation is triggered by adverse market conditions.

[Party Name] agrees to compensate [other party] for any losses caused by unforeseen adverse market conditions, such as significant price fluctuations, shifts in demand, or changes in regulations that negatively impact the execution of this agreement.

Compensation for losses with wrongful termination clause

This variation applies when compensation is required due to wrongful termination.

If [Party Name] wrongfully terminates this agreement before the completion of its term, they agree to compensate [other party] for all losses resulting from the termination, including any lost income, severance, and any operational disruptions caused by the early termination.

Compensation for losses with shortfall clause

This variation applies when compensation covers shortfalls in agreed deliveries.

[Party Name] agrees to compensate [other party] for any shortfall in the delivery of goods or services as specified in this agreement. Compensation will cover the costs associated with obtaining alternative goods or services to meet the agreed-upon requirements.

Compensation for losses with rework costs clause

This variation applies when compensation covers the cost of rework.

If [Party Name] delivers goods or services that fail to meet the agreed specifications, [Party Name] will compensate [other party] for the costs of rework, including labor, materials, and any other costs directly related to rectifying the delivered items.

Compensation for losses with system failure clause

This variation applies when compensation is due to system failure.

[Party Name] agrees to compensate [other party] for any losses resulting from a system failure, including loss of data, downtime, or system crashes caused by [Party Name]’s actions or omissions. Compensation will cover the costs of repairing or restoring the system to full functionality.

Compensation for losses with failure to meet delivery deadlines clause

This variation applies when compensation is triggered by missed delivery deadlines.

[Party Name] agrees to compensate [other party] for any losses incurred due to the failure to meet delivery deadlines as outlined in this agreement. This includes penalties for late delivery, expedited shipping costs, and any operational delays resulting from the missed deadline.

Compensation for losses with incomplete performance clause

This variation applies when compensation is due to incomplete performance.

[Party Name] agrees to compensate [other party] for any losses incurred due to incomplete performance of services or delivery of goods under this agreement. Compensation will cover any gaps in performance and any additional costs required to complete the contracted work.

Compensation for losses with professional negligence clause

This variation applies when compensation is due to professional negligence.

If [Party Name] is found to be professionally negligent in fulfilling their obligations under this agreement, they agree to compensate [other party] for all resulting losses, including legal fees, damages, and other costs directly associated with the negligence.

Compensation for losses with post-project costs clause

This variation applies when compensation covers post-project costs.

[Party Name] agrees to compensate [other party] for any additional costs incurred after the completion of the project, including but not limited to project-related follow-up work, maintenance, or ongoing support required due to the original project’s outcome.

Compensation for losses with intellectual property misappropriation clause

This variation applies when compensation is required due to intellectual property misappropriation.

[Party Name] agrees to compensate [other party] for any losses resulting from the misappropriation or unauthorized use of intellectual property, including legal costs, damages, and any lost profits due to the infringement or misuse of proprietary content.

This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Last updated 10 Mar 2025