Legal Question in International Law in Philippines

indemnify

I am being requested to manage an investment fund for an individual. I reside in U.S., the fund holder resides in Philippines.

One of the Articles of contract include this

''The Proxy Holder shall be required to exercise due care and diligence in selecting the investment opportunities and avoid capital losses to the assets, fluctuation returns and negative consequences arising from faulty or inordinate investment assumptions.

The Proxy Holder hereby covenants to indemnify the instructing the Instructing Party against all such losses, cost, charges, damages and expenses incurred by the Proxy Holder by reason or in respect thereof.

Provided the Proxy Holder shall not be held responsible for any consequence out of force majeure namely warfare, riots measures adopted by authorities or changes in legislation in Host Countries or Abroad.''

the very intent of the contract is for investment in business on fund holders behalf. How could I, as manager, be held to indemnify holder in event of business downturn, failure outside of force majeure?

Business investment by it's very nature contains risk, which all parties investing must share.

How could I be expected to guarantee no loss to fund holder?


Asked on 4/03/09, 1:35 pm

1 Answer from Attorneys
Lawrence Graves Coolidge & Graves PLLC

Re: indemnify

You clearly need a lawyer to look over the entire proposed contract. From the excerpt, however, it appears that your suspicion is correct and that you would be effectively guaranteeing the principal of the portfolio irrespective of fluctuations in the markets.

Best wishes,

LDWG

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Answered on 4/03/09, 2:14 pm


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