If someone sues Square because of something you did while using the service, you are responsible for covering Square's legal costs and any resulting damages. This also applies if someone else causes a problem using your account.
This analysis describes what Square's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The indemnification clause extends to third parties using your account, which means a merchant could be financially responsible for legal claims arising from their employees' or customers' use of the merchant's Square account.
The updated terms modify how arbitration disputes are resolved when 25 or more similar claims are brought against Square. Previously, Square's terms referenced 'Bellwether Arbitration procedures' under which test cases would be selected and remaining demands could proceed individually under standard rules if settlement failed. The updated framework establishes a mandatory mediation phase after initial arbitrations resolve, and requires remaining claims to proceed in batches of up to 100 rather than individually, with one arbitrator and consolidated fees per batch. This may reduce the procedural flexibility for claimants pursuing claims outside the initial test-case group, though the batch structure may reduce overall administrative costs. The terms now explicitly state that NAM shall administer batches concurrently and that parties will engage in a 'single global mediation' before batch proceedings commence.
View change record →Provision was broadened from merchant-specific to all users and now includes expanded language covering violation of applicable law and third-party infringement, with explicit inclusion of attorneys' fees.
View full change record →Merchants agree to cover Square's legal defense costs and damages in a broad range of dispute scenarios, including situations involving third parties who use the merchant's account, which creates open-ended financial liability that could be significant depending on the nature of the claim.
How other platforms handle this
Any claim that any user submission made by you has caused damage to a third party
Any access to or use of the Services or goods through your account by others, including your spouse, dependents, Recipients, and any access by AI Agents you enable or that operate on your behalf...
you agree to cooperate with Walmart if and as requested by Walmart in the defense and settlement of such matter.
"You will indemnify, defend, and hold harmless Square and its officers, directors, employees, agents, and successors from and against any and all claims, damages, losses, costs, liabilities, and expenses (including reasonable attorneys' fees) relating to or arising out of your use of the Services, your violation of these terms, your violation of applicable law, or infringement of any third party's rights by you or any third party using your account.Excerpt from Square's Terms of Service
REGULATORY LANDSCAPE: Broad indemnification clauses in commercial agreements are generally enforceable under California contract law, which governs this agreement, subject to public policy limitations.
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The indemnification clause extends to third parties using your account, which means a merchant could be financially responsible for legal claims arising from their employees' or customers' use of the merchant's Square account.
Merchants agree to cover Square's legal defense costs and damages in a broad range of dispute scenarios, including situations involving third parties who use the merchant's account, which creates open-ended financial liability that could be significant depending on the nature of the claim.
ConductAtlas has identified this type of provision across 228 platforms. See the full comparison.
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