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Indemnification agreements are common during the sale and purchase of a business. It is fairly common for sellers to provide a certain amount of indemnification for the purchaser, based on the condition of the business at the time of the sale. Although the seller's level of indemnification is not unlimited, the seller may be responsible for financial losses that occur as a result of misrepresentations about the business at the time of the sale. Pending litigation, worker claims, and other undisclosed obligations may very well trigger the indemnification clause to kick in, at which point the seller must make good on his obligation to the purchaser.
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