For years, lenders have insisted that tribes indemnify them in loan documents for the bank's own negligence and misconduct concerning the deal. Tribes have too frequently accepted the bank-demanded indemnity language, simply in order to get the cash they need to run tribal governments and businesses. More specifically, some commercial lenders, and an increasing number of vendors and service providers to tribes, are insisting that tribes indemnify them from the banks/vendor/providers' own negligence, carving out from the indemnity clauses only those non-Indian businesses' "gross negligence" and "willful misconduct." And the the banks/vendor/providers treat the issue as non-negotiable; as "take it or leave it"/"our way or the highway."
Tribes should simply not be indemnifying non-Indian businesses from basic negligence. Period. The banks/vendor/providers' simple negligence should be carved out of any indemnity language that the tribe agrees to in favor of those non-Indian businesses.
The banks/vendor/providers' position, i.e., assume liability for our silly behavior or we won't loan you cash or provide you services, is preposterous -- in fact gross (disgusting) and willfully disrespectful to tribal governments and enterprises. Hopefully tribes who see over-reaching indemnity language in proposed loan documents and other commercial agreements, will reject any such language out of hand. If enough tribes do, that language will eventually disappear from commercial agreements in Indian Country.
Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe helps with all varieties of tribal economic development and diversification initiatives. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.
