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TexLaw
TexLaw, Attorney
Category: Business Law
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Experience:  Internationational Commercial Attorney
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Someone I know signed an indemnification agreement several

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Someone I know signed an indemnification agreement several years ago prior to the sale of a business. He had been injured at this business and the franchisor wanted an indemnification from a possible lawsuit due to this injury. He had a business partner at the time and he threatened him with signing it as it was contingent for the completion of the sale. This person really didn't want to sign the agreement and between the partner threatening him and his attorney stating that it would not affect any lawsuits they were bringing he signed it. Now the same attorney states that this agreement is a problem even though he said it would not be. Does he have any options or recourse?
Hi,

My name is XXXXX XXXXX I will be assisting you with your legal question.

The first issue which must be addressed in your question is whether the indemnification agreement is binding. If there was valid consideration, i.e., if the franchisor gave the person something in return for the indemnification agreement, then this points towards the agreement's validity.

On the other hand, if the agreement was signed under duress, it could be argued that it is invalid. Duress is the use of force or pressure by one party to make the other party agree to the contract. The
force does not have to be physical - it may be mental pressure. The use of duress makes the contract voidable by the party under duress. In this case, it sounds as if there was mental pressure applied. But for the pressure to qualify as duress, it must be of an unlawful nature (i.e., blackmail). Thus, if it was only pressure regarding future economic gain or loss, this will not count as duress.

The next issue which must be addressed here is the fact that his attorney provided him with incorrect advice. The failure to provide correct advice may be legal malpractice. This person may have recourse then against the attorney who gave the wrong advice if the indemnification agreement bars the lawsuits now, which is exactly what the attorney said it would not do.

So, in sum, his options are to challenge the validity of the agreement as to consideration and duress, and if that fails he has the option of suing his attorney for legal malpractice.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am credited by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Kind regards,
Zachary
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