Defence Clause Lease Agreement

A defence clause lease agreement, commonly known as a “defence and indemnity” clause, is an essential feature of many business agreements. It is particularly important in commercial or industrial property leases, where the lessee (tenant) may be liable for damages caused by their activities on the premises.

A defence clause lease agreement is a provision in the lease contract that requires the lessee to defend and indemnify the lessor (landlord) against all claims and liabilities arising from the lessee’s use of the property. This clause typically covers a range of risks, including property damage, personal injury, and environmental hazards.

The defence clause essentially transfers the risk of loss from the lessor to the lessee. This means that if a third party sues the lessor for damages caused by the lessee’s activities on the property, the lessee is responsible for defending the lawsuit and paying any damages awarded.

To ensure that the defence clause is enforceable, it is essential to draft the language clearly and unambiguously. The clause should specify the types of claims or liabilities covered, the procedures to be followed in the event of a claim, and the maximum amount of liability that the lessee is willing to assume. The clause should also identify any exceptions or limitations on the lessee’s obligation to defend and indemnify the lessor.

It is important to note that a defence clause lease agreement does not absolve the lessor of all responsibility for the property. The lessor is still responsible for maintaining the property in a safe condition and complying with any relevant laws and regulations. However, the defence clause shifts some of the risk and liability to the lessee, who is in the best position to control and prevent risks associated with their use of the property.

In conclusion, a defence clause lease agreement is a critical element of any commercial or industrial lease. By transferring risk and liability to the lessee, the defence clause protects the lessor from potentially costly lawsuits and damages. To ensure that the defence clause is clear and enforceable, it is essential to work with an experienced attorney and carefully review the language of the lease agreement.