For instance if the lead seller violates the law with an outbound call resulting in a transfer the lead buyer usually takes the heat both because the buyer is typically a larger brand but also because the buyer is the only one the consumer actually interacts with by name. And, of course, if the buyer is purchasing data they are on the hook because they made the phone call at issue.

Many times lead buyers will insist on indemnity but I am here to tell you those indemnity provisions may not be worth the paper they are printed on. If the lead seller lacks either the funds or the will to meet their obligation then the lead buyer is stuck.

Plus the lead buyer often will not want to throw good money after nad and chase the lead seller for indemnity.

But sometimes they do.

Take the case of Schweer v. Elevate Health, for instance. There Elevate was sued in a TCPA class action for a lead alleged supplied by Acquity, LLC. Plaintiff claimed the lead was invalid but the contract between Elevate and Acquity provided:

Both Parties represent and warrant that all lists of Leads and contacts
provided under this Agreement have been procured with valid
consent, including leads procured by Acquity and transferred to
[Elevate], and comply with all applicable federal, state, and local
laws, rules and regulations, including without limitation, those
regarding e-mail, direct mail, and mobile marketing, telephone
solicitations, and fax broadcasts, including, without limitation proper
processing of opt-out, do-not-call, and similar requests under the
CAN-SPAM Act of 2003, the Telephone Consumer Protection Act of
1991 (“TCPA”), the Telemarketing Consumer Fraud and Prevention
Act (“TCFA”) and the FCC and FTC rules and regulations
implementing the TCPA and TCFA.

The contract also provided:

Each of the Parties shall indemnify the other and hold harmless from,
any and all claims, action, damages, expenses (including court costs,
arbitration costs, and reasonable attorney fees), obligations, losses,
liabilities and liens, imposed or incurred by, or asserted against any of
the Parties, their successors or assigns, occurring solely as a result of
a breach of this Agreement.

Now this is an intriguing mutual indemnity provision you so often see in these contracts. Its always interesting to see how these infinity mirror provisions turn out in court.

Will have to see how this claim turns out. If Elevate defeats the Plaintiff’s claim presumably they will be looking for nothing more than attorneys fees. But if Plaintiff wins, Acquity could find itself on a very big hook.