What is Indemnification Basket?
Definition
An indemnification basket is the threshold the buyer must cross before recovering from the seller for breaches of reps and warranties. Tipping basket pays from dollar one once threshold is crossed; deductible basket pays only above the threshold. On a $3M SMB deal with a 1% basket, the structure determines $30K of real recovery on every breach.
Frequently asked questions
What is Indemnification Basket?
An indemnification basket is the threshold the buyer must cross before recovering from the seller for breaches of reps and warranties. Tipping basket pays from dollar one once threshold is crossed; deductible basket pays only above the threshold. On a $3M SMB deal with a 1% basket, the structure determines $30K of real recovery on every breach.
Why does indemnification basket matter in a contract?
Risk level: High. Tipping vs deductible can change real recovery by hundreds of thousands of dollars. Inkvex flags indemnification basket clauses during analysis, explains the risk in plain English, and suggests negotiation language to protect your interests.
How does Inkvex analyze indemnification basket clauses?
Inkvex scans your contract for indemnification basket-related clauses, flags risks in plain English, quotes the exact language from your document, and cites jurisdiction-specific laws that may affect enforceability. Upload any contract at inkvex.app for a free analysis.
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