# Indemnification

The seller's promise to cover losses their statements cause.

It is the enforcement mechanism behind every promise in the [purchase agreement](https://searchspheresource.com/glossary/purchase-agreement); the basket and cap numbers decide what a breach is actually worth to you. Just as important is whether anything backs it: a claim against a seller who has spent the proceeds is a lawsuit, while a claim against money held in escrow is a deduction. That is why the escrow amount and how long it is held often matter more in practice than the size of the cap itself.

In numbers: With a $40k basket and a 10% cap on a $4M deal, a $24k breach is yours to eat (under the basket) while an $800k one recovers only to the $400k cap; the two numbers, not the promise, set your real protection.

Source: https://searchspheresource.com/glossary/indemnification
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt