Page 39 - GS170902

Education

by the rightful owner against liability will not exceed the amount indicated. This is a very important clause
the IT company. For example, because it renders all other rights (such as indemnification) useless if the cap
suppose the IT company is pro- on liability is too low.
viding a gateway system – that
it stole from another party. The ISOs should pay close attention to limitation of liability clauses in IT supply
aggrieved party then sues the contracts to see if they meet with their commercial needs.
IT company, the ISO and all of In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal,
the ISO's merchants for intellec-
tual property infringement. This accounting or other professional services. If you require legal advice or other expert assistance,
kind of claim is one for which an seek the services of a competent professional. For further information on this article, email Adam
ISO can likely specify indemnifi- Atlas, Attorney at Law, at atlas@adamatlas.com or call him at 514-842-0886.
cation at the negotiation stage of
the IT services agreement.
• Security breach
Where there is a breach in the se-
curity of the IT provider, the ISO
will likely wish to have indemni-
fication by the IT provider.
• Intentional wrongdoing or
gross negligence
Intentional wrongdoing is easy
to define: it's the common sense
definition of someone doing
something intentionally wrong.
Gross negligence (as distinct
from negligence) is a bit trickier.
Definitions of this term will vary
from state to state and also in
accordance with the specific cir-
cumstances of the case.
That said, if negligence is not
doing what a reasonable person
in the circumstances would nor-
mally do (that is, turn the engine
off after parking a car in a closed
garage), then gross negligence is
a conscious and voluntary disre-
gard for the need to use reason-
able care, which is likely to cause
foreseeable grave injury or harm
to persons, property or both. It
is conduct that is extreme com-
pared with ordinary negligence,
(such as not even knowing an en-
gine was on).
ISOs will likely wish to negoti-
ate for indemnification by the IT
provider for harm done as a re-
sult of intentional wrongdoing or
gross negligence.

Limitation of liability
I have saved the best for the last.
Limitation of liability means what it
says – it means that the IT provider's

39