In a short letter ruling, with widespread applicability, the Court of Chancery explained in Paul Elton, LLC v. Rommel Delaware, LLC, et al., C.A. No. 2019-0750-KSJM (Del. Ch. Mar. 16, 2022), that typical indemnification provisions ordinarily:
“are presumed not to require reimbursement for attorneys’ fees incurred as a result of substantive litigation between the parties to the agreement absent a clear and unequivocal articulation of the intent. This presumption prevents broadly written indemnification provisions, which may be intended only to hold the indemnitee harmless from claims brought by third parties to the contract, from swallowing the American Rule. Thus, purely contractual indemnification provisions only shift first-party claims if the contract explicitly so provides.”
See Slip op. at 2-3. See also footnotes 8-10.