52.232-39
Unenforceability of Unauthorized Obligations
Any clause in a commercial agreement requiring the government to indemnify a contractor is unenforceable unless specifically authorized by law and agency regulation.
Overview
FAR 52.232-39 addresses the unenforceability of unauthorized obligations in government contracts, specifically regarding End User License Agreements (EULAs), Terms of Service (TOS), or similar agreements that attempt to bind the government to indemnification clauses. The clause ensures that any provision requiring the government to indemnify a contractor or third party—potentially violating the Anti-Deficiency Act—is unenforceable unless specifically authorized by statute and agency regulations. This protects the government from inadvertently accepting financial liabilities beyond its legal authority, even if such clauses are embedded in standard commercial agreements or accepted via click-through mechanisms.
Key Rules
- Unenforceability of Indemnification Clauses
- Any EULA, TOS, or similar agreement that requires the government to indemnify the contractor or others is unenforceable unless specifically authorized by law.
- No Implied Agreement
- The government and its authorized users are not considered to have agreed to such clauses, even if they click "I agree" or otherwise accept the agreement electronically.
- Striking Unauthorized Clauses
- Any unauthorized indemnification clause is considered stricken from the agreement.
- Exceptions
- The only exception is for indemnification expressly authorized by statute and agency regulations.
Responsibilities
- Contracting Officers: Must ensure this clause is included in applicable contracts and that contractors understand its implications.
- Contractors: Must recognize that indemnification clauses in standard agreements are unenforceable against the government unless specifically authorized.
- Agencies: Must ensure compliance with the Anti-Deficiency Act and agency-specific indemnification authorizations.
Practical Implications
- This clause exists to prevent the government from incurring unauthorized financial liabilities through commercial agreements.
- Contractors should not expect the government to be bound by standard indemnification clauses in EULAs or TOS.
- Common pitfalls include assuming click-through acceptance binds the government or failing to remove unenforceable clauses from agreements.