Question

Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this?

a) Arbitration
b) Choice of law
c) Damages block
d) Indemnification

Answer 1

Hannah's mother is shielded from financial or legal liability through an indemnification clause in their agreement.

Step-by-step explanation:

The clause that states Hannah's mother can't be held financially or legally liable if there are any problems with the store is known as an indemnification clause. This type of clause is designed to protect a party from legal liability, ensuring that they will not have to pay for any losses or damages that might occur. In this scenario, Hannah's mother is protected by the indemnification clause, which absolves her from financial responsibility should the business face legal or financial issues.