When a shopper is injured in or near a department store, the store's insurer consults the applicable lease agreement early on. The lease may require the mall owner to indemnify the tenant store if the shopper brings a lawsuit, or it may require the store to indemnify the mall.
If the shopper sues both the mall and the store, then the party entitled to indemnification under the lease can “tender” the suit to the other. When tender is accepted, the party accepting tender agrees to defend the other during the lawsuit, and to pay any judgment entered against it at trial. As such, an indemnification clause can allow for a significant savings in defense costs.
On occasion, however, a lease is silent on the issue of indemnification. Or the indemnification clause cannot be enforced because it is too general and vague. In these situations, the parties may be able to resort to common law indemnification.
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