13.4 The university is an authority of the State of Texas and, according to the Auto-Insurance Plan of the University of Texas System Professional Medical Malpractice Self-Insurance Plan, under the supervision of Section 59.01, Texas Education Code. For the duration of this agreement, the university has maintained and will retain appropriate insurance to cover its compensation obligations under this agreement. A typical compensation clause consists of two separate and distinct obligations: a duty to compensate and a defence obligation. 5. Compensation – A standard compensation, except that the promoter limits liability to charges of bodily harm or death and imposes several conditions on his obligation to compensate: (1) the proper performance of the study, (2) notification and (3) the right to control of the defence. The allowance also gives the university the right to choose its own board. Whatever type of compensation clause to be developed, great caution should be exercised in the development, since a lack of specificity in the terms may lead to a clause which, in the eyes of the law, can be interpreted in a much different way from the one on which the parties concerned agreed. Of course, the party that receives compensation to the other will want this clause to be as narrow as possible, while the party that receives it will cover it as best as possible. This discrepancy must be corrected in contract negotiations. There are several types of compensation clauses that can be used in a contract, and these include: instead of agreeing to one party that compensates the other, compensation could be agreed to go both ways: mutual compensation. [13.3: This paragraph relating to sponsor`s insurance coverage may be added to any compensation.] Compensation clauses are agreements made under contracts that are used to transfer liability between the parties, to compensate a party for certain acts for which they might otherwise be held liable, or to be uneasy. Such clauses may allow for mutual compensation, with both parties compensating the other party for losses due to the negligence of one party, as well as unilateral compensation, with only one party being compensated for negligence.

Compensation clauses are included in almost all commercial contracts. It is an essential instrument for allocating risks between the parties and, as such, is one of the most frequently and most negotiated provisions in a contract.