Home Q&A Forum Is an indemnification agreement enforceable if it was signed under duress?

Contracts

Indemnification Agreement

California

Asked on Aug 14, 2025

Is an indemnification agreement enforceable if it was signed under duress?

I signed an indemnification agreement with my employer after being threatened with termination if I didn't comply, and now I am facing potential liability for a work-related accident. I am wondering if the agreement is enforceable since I signed it under duress, and if I can be held responsible for the damages despite the circumstances surrounding the signing of the agreement.

Answers from 1 Lawyer

Answer

Contracts

California

Answered 260 days ago

An indemnification agreement signed under duress may not be enforceable, but whether it can be voided depends on the specific facts of your case and the law in your jurisdiction. Contract law requires voluntary consent. If consent is obtained through coercion, the agreement is generally considered voidable by the party placed under duress. Legal Standard for Duress Courts recognize two main forms of duress. Physical duress involves threats of bodily harm and is the clearest ground to void a contract. Economic duress occurs when someone is pressured into signing due to wrongful or coercive economic threats. The threat of termination can sometimes qualify, but courts apply a high standard. They will look at factors such as whether you had any reasonable alternatives, whether the employer acted in bad faith, and whether the circumstances left you with no meaningful choice but to sign. For example, if you were told you’d be fired unless you signed immediately, with no chance to review the document or seek advice, that kind of artificial urgency could support a duress claim. On the other hand, if you were given time to consider the agreement and could have reasonably sought other employment, courts are less likely to find duress. Employment-at-Will Context Most states follow the at-will employment doctrine, which allows employers to terminate employees for almost any reason that is not illegal. Because of that, courts often treat workplace ultimatums as business pressure rather than wrongful coercion. However, the doctrine doesn’t give employers unlimited power. If the termination threat was used specifically to force you to assume liability for risks the employer is legally responsible for, that can be considered improper and may render the agreement voidable. Shifting Liability to Employees Indemnification clauses in employment contracts are closely scrutinized because employers generally bear the legal duty to maintain safe workplaces. Federal law under the Occupational Safety and Health Act requires employers, not employees, to ensure workplace safety. Courts in many states have refused to enforce agreements that shift liability for workplace accidents from the employer to the employee, especially if the employer is in a better position to insure against those risks. For example, California Civil Code §1668 voids contracts that exempt a party from responsibility for violations of law or duties owed to the public. Similar public policy principles apply in other states. Practical Challenges Even if duress can be established, you may still need to demonstrate that the indemnification terms themselves were unreasonable or unconscionable. Courts will often look at whether the agreement was one-sided, whether you had a meaningful opportunity to negotiate, and whether the employer sought to impose obligations that are inconsistent with public policy. Next Steps If you’re facing liability based on this indemnification clause, it’s important to preserve all evidence of how the agreement was presented to you. Keep records of emails, conversations, or witnesses that can confirm the circumstances of the signing. An employment or contract attorney in your state can evaluate whether the clause is enforceable, raise duress or unconscionability as defenses, and, if necessary, argue that public policy prevents shifting liability to you. On Contracts Counsel, you can connect with experienced contract attorneys who can review your agreement, consider the circumstances surrounding it, and guide you on your next steps.

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Are these clauses safe to sign into in an NDA?

A company approached me to help them develop a prototype of a software application, so they can secure a round of funding. To this end, they gave me an NDA to sign, after which they would divulge their design artifacts for my review. Good so far. But the NDA has these terms which I am concerned about: Intellectual property: At any point during and/or as a direct result of the signing of this Agreement when you create something for the purpose of fulfilling work for (co), said creation is considered work-made-for-hire and is owned by (co). This includes copyrightable material, trademarks, patents (a whole list), whether developed by you alone of in collaboration with anyone else (I am alone). The company owns everything. I got it. Now coming to another point: Indemnification Provision: if (co) of a (co) partner gets sued as a result of your work, you agree to step in and pay for all relevant costs, unless (co) has expressly instructed you in writing that you carry out the task for which (co) or its partner was sued While I would never knowingly carry out something illegal or attract lawsuit, as an individual I have limited knowledge. And besides, I feel this will leave me personally open to legal liability for indefinite period of time, even if someone else takes my code in continues development on it later Are my concerns legit? How should this be altered (if it should) so it is fair to me (if this is unfair)?

View Cameron S.

Cameron S.

Answered Feb 18, 2022

These are not appropriate provisions for an NDA. An NDA should only cover the disclosure of confidential information - not development and assignment of intellectual property. You should not be transfering ownership of IP (or anything you develop) under an NDA. It should also not include an indemnification provision. Both of these clauses are appropriate for a development agreement or a professional services agreement. Putting this aside, if this were a development/professional services agreement, then you probably would want to protect any background technology or pre-existing works that you already own prior to the agreement (and would license the (co) rights to this background technology if necessary). And, you should not be indemnifying unless you intentionally used third party materials or knowingly stole another party's work to complete the development for (co). This is because it is not feasible for you to know what trademarks or patents are out in the world. If what you develop infringes, that should not be your responsibility/risk. You probably aren't getting paid enough to take on that risk. Copyright requires knowing that you stole copyrightable material, so the knowledge qualifier described above means that the (co) is protected under the indemnification for copyright infringement issues caused by you.

Read 1 attorney answer>

Contracts

Software Agreement

California

Asked on Oct 6, 2022

Can a SaaS company terminate and agreement with a client?

We are a SaaS company that wants to get out of a relationship with a client. What are our options?

View Christopher M.

4.9 (8)

Christopher M.

Answered Oct 7, 2022

Typically your options are going to be controlled by the SAAS Agreement or other contracts between you and the client. There should be a section in there called “Termination” or something similar. Really, it would require a review of the contract to give more specific advice on this one.

Read 2 attorney answers>

Contracts

Purchase Order

California

Asked on Oct 18, 2022

Contract versus PO?

I'm working with a client who refuses to sign our contract document while mentioning that the PO would suffice for that purpose. I already signed the contract and sent it back to the client that I'm working with, but they didn't sign it so far and refuse to sign it. But according to them, they will send PO. Is the PO legally binding to them to make the payment? Would the PO really suffice against the contract that I signed?

View Christopher M.

4.9 (8)

Christopher M.

Answered Nov 8, 2022

Annoying as this answer it, it really does depend. Some purchase orders (especially in the government contracting world) automatically become contracts once they are accepted and signed. If this is the other sides normal mode of operating it is not unheard of for them to be reluctant to accept a different contract in case it creates different or conflicting terms. At the end of the day there is nothing inherent in a PO that would mean it cannot serve as a binding contractual document, it just depends on the language in the PO.

Read 1 attorney answer>

Contracts

Employee Separation Agreement

California

Asked on Jun 27, 2023

Pros & cons of employee separation agreements?

I am a small business owner and I am considering offering an Employee Separation Agreement to an employee who is leaving the company. I want to understand the pros and cons of this type of agreement so that I can make the best decision for my business.

5.0 (1)

Gagandeep K.

Answered Jun 30, 2023

There are several reasons for using an employee separation agreement - it can be used to protect confidential information and IP, obtain general liability waiver for certain legal claims (e.g., wrongful termination), offer an employee certain benefits and severance pay, and include additional provisions (e.g., non-disparagement clause so the employee cannot spread negative information about the company, return of company equipment, etc.). Just as an employer is not legally required to offer a severance agreement, an employee is not required by law to sign a severance agreement. However, an employee may be more likely to sign a reasonable, balanced severance agreement. You can read more about severance agreements here: https://www.contractscounsel.com/t/g/us/severance-agreement/11#toc--circumstances-for-offering-severance-

Read 1 attorney answer>

Contracts

Severance Agreement

California

Asked on Jul 21, 2023

Can a severance agreement be digital?

I recently accepted a voluntary severance package from my employer and have been asked to sign a severance agreement. I am curious if this agreement can be signed digitally, as I am not currently in the same city as my employer. I am looking for advice on the legalities of digital agreements and any potential risks associated with signing a severance agreement digitally.

View Christina M.

5.0 (12)

Christina M.

Answered Jul 27, 2023

In 1999 the California Legislature enacted the Uniform Electronic Transactions Act (the “UETA”), Civ. Code, §§ 1633.1 et seq., which provides that when a law requires a record to be in writing or requires a signature, an electronic record or signature satisfies the law. The law requires that any contract entered into between two parties may not be denied legal enforceability simply because of the use of an electronic signature. This has also be upheld in the employment law setting in some case law.

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Is an indemnification agreement enforceable if it was signed under duress?

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