New York Times (04/14/12) Alexandra Levit
Around 31% of the U.S. work force is independent or contingent,
including temporary workers, contractors, and the self-employed,
according to a 2006 government report. Contingent workers were
favored by employers during the recent recession because hiring
them helped hold down costs, and they are not likely to go away
given that employers remain hesitant to hire permanent
employees.
Buyers of a business generally expect sellers to be responsible for certain liabilities relating to when the seller owned its business—a concept mergers and acquisitions professionals refer to as indemnification. Indemnification is one of the most heavily negotiated, and potentially most significant, provisions of a purchase agreement, and understanding the terminology common to such agreements is essential when negotiating a deal. Attorney Paul Pincus of Ortoli Rosenstadt LLP explains what sellers are liable for, how a seller’s liability may be limited, and how buyers may seek to fund potential indemnity claims.
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