Legal Fraud Liability Agreement

LEGAL FRAUD LIABILITY AGREEMENT

This Legal Fraud Liability Agreement (the "Agreement") is made and entered into as of the Effective Date: by and between Client Name: (the "Client"), and Provider Name: (the "Provider"). Each of the Client and the Provider is a "Party" and collectively the "Parties."

RECITALS

WHEREAS, the Parties have entered into commercial dealings under which one Party may supply services, deliverables, or be entrusted with assets or data that, if misused or falsified, could constitute fraud; and

WHEREAS, the Parties desire to allocate responsibility and remedies in the event that fraud, intentional misrepresentation, or willful misconduct occurs in connection with their relationship; and

WHEREAS, the Parties intend by this Agreement to set forth procedures for investigation, notice, indemnity, mitigation and the measure of damages arising from any proven fraudulent acts.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:

1. DEFINITIONS

1.1 "Fraud" means a false representation or deliberate omission of material fact made with actual knowledge of its falsity and with intent to induce action or forbearance by another Party, and includes willful misrepresentation, intentional falsification of records, and unauthorized diversion of funds or assets.

1.2 "Covered Losses" means direct monetary losses, reasonable costs of investigation and remediation, and reasonable attorneys' fees incurred as a direct result of Fraud, but does not include consequential or speculative damages except as provided in Section 5.

2. REPRESENTATIONS AND WARRANTIES

2.1 Each Party represents and warrants that it has full power and authority to enter into this Agreement and to perform its obligations hereunder. Each Party further represents that, to its knowledge, no information material to the risks contemplated by this Agreement has been knowingly withheld from the other Party.

2.2 Each Party represents that it will maintain reasonable internal controls, recordkeeping, and supervisory procedures designed to prevent, detect and deter Fraud in connection with the activities governed by this Agreement.

3. FRAUD LIABILITY

3.1 If Fraud by a Party is established by a final judgment of a court of competent jurisdiction, an agreed written settlement between the Parties, or a binding arbitration award, the Party committing Fraud (the "Fraudulent Party") shall be liable to the non-fraudulent Party (the "Injured Party") for Covered Losses arising directly from such Fraud.

3.2 The Parties agree that the measure of recovery for Covered Losses shall be limited to documented out-of-pocket losses directly caused by Fraud, subject to the limitations and exclusions set forth in this Agreement.

4. INDEMNIFICATION; DEFENSE

4.1 The Fraudulent Party shall indemnify, defend and hold harmless the Injured Party from and against all Covered Losses resulting from such Fraud. Indemnification includes repayment of amounts improperly taken, reasonable costs of investigation, reasonable attorneys' fees, and reasonable costs of remediation.

4.2 The Injured Party shall provide prompt written notice of a claim for indemnity to the Fraudulent Party and shall permit the Fraudulent Party to assume control of the defense of the claim, provided that the Fraudulent Party conducts the defense diligently and in good faith. The Injured Party may participate in the defense at its own expense.

5. LIMITATION OF LIABILITY

5.1 Except for liability arising from Fraud as defined in Section 1.1 or for willful misconduct, neither Party shall be liable to the other for punitive, exemplary, or consequential damages, including lost profits, except where such relief is available under applicable law for proven willful fraud.

5.2 The Parties may agree to a monetary cap on liability for Fraud losses other than amounts ordered by a court or arbitrator. Agreed cap (if any):

6. INVESTIGATION; NOTICE; PRESERVATION

6.1 The Injured Party shall provide written notice to the other Party within days after discovery of suspected Fraud, describing the facts reasonably available at the time.

6.2 Upon notice, the Parties shall cooperate in a joint investigation. Each Party shall preserve relevant documents, electronic records, and other evidence pending resolution. Failure to preserve material evidence that substantially prejudices an investigation may result in adverse inference or other relief as determined by a tribunal.

7. MITIGATION; REMEDIES

7.1 The Injured Party shall take commercially reasonable steps to mitigate Covered Losses, including suspension of affected transactions and steps to prevent further loss. Failure to mitigate will reduce recoverable damages to the extent the failure causes additional loss.

7.2 Remedies provided in this Agreement are cumulative and are in addition to any other remedy available at law or in equity, including rescission, restitution, injunctive relief and damages.

8. CONFIDENTIALITY

8.1 Except as required by law or as necessary to pursue or defend claims under this Agreement, the Parties shall keep the existence of alleged Fraud investigations and the details of any settlements or judgments confidential.

9. INSURANCE

9.1 Each Party shall maintain, at its expense, insurance coverage appropriate to its activities and risks, including fidelity, cyber liability or professional liability insurance where applicable. Insurance shall not limit a Party's obligations under this Agreement unless expressly stated.

10. NOTICES

Client Notice Address

Provider Notice Address

Notices shall be in writing and shall be deemed given when delivered personally, sent by nationally recognized overnight courier, or three (3) business days after deposit in the mail when sent by certified mail, return receipt requested, to the addresses provided above or such other address as a Party may specify in writing.

11. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its choice of law principles.

12. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written.

13. SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect and such invalid or unenforceable provision shall be replaced by a valid and enforceable provision that most closely reflects the Parties' original intent.

14. AMENDMENTS; WAIVER

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties. The failure of either Party to exercise any right under this Agreement shall not operate as a waiver of that right.

15. COUNTERPARTS; ELECTRONIC SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by electronic transmission of an image of a signature shall be effective as originals.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date first written above.

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