Post-closing indemnity claims are governed by the agreement’s procedure, which is frequently more demanding than claimants expect.
Notice content. Most agreements require a description of the claim in reasonable detail, the provision alleged to be breached, and a good faith estimate of the loss. Generic notices designed to stop the survival clock are routinely challenged and sometimes rejected.
Timing. Notice within the survival period, and in many agreements promptly after discovery. Where prompt notice is a condition, failure can bar the claim; where it is a covenant, the indemnifying party must show prejudice. The agreement should say which, and if it does not, the argument follows.
Third-party claims have their own procedure: notice, the indemnitor’s right to assume the defence, counsel selection, settlement consent, and cooperation.
Loss definition. Whether it includes diminution in value, multiples-based damages, consequential damages, and whether it is reduced by insurance proceeds and tax benefits. Multiples-based damages are the largest single variable and should be addressed expressly.
Escrow release. Pending claims hold back the amount claimed; the description requirements are what prevent an inflated hold.
Preserve the evidence from the moment a problem is identified, because the claim is proved from the target’s own records.