Indemnity in law

What is the legal definition of indemnity? Frequently confused with guarantee, an indemnity is a primary obligation that is enforceable irrespective of whether the beneficiary could sue the person responsible for causing the loss. In its widest sense, indemnity means recompense for a loss or liability.

Some indemnity claims arise by operation of law. An indemnity is distinct from a warranty in that: An indemnity guarantees compensation equal to the amount of loss subject to the indemnity , while a warranty only.

The word indemnity means security or protection against a financial liability. Warranties do not cover problems known to the. It typically occurs in the form of a contractual agreement made between parties in which one party agrees to pay for losses or damages suffered by the other party.

This is usually applied in civil lawsuits concerning negligence claims. In that case, the general meaning of indemnity is “hold harmless. Depending on the way the clause is drafted , indemnity can cover: all loss caused by the trigger event: the clause can be drafted very broadly, so that the indemnifying party has to pay.

When the term indemnity is used in the legal sense, it may also refer to an exemption from liability for damages. There are no related clues (shown below).

To indemnify someone is to absolve that person from responsibility for damage or loss. A SA Law yer Will Answer in Minutes! Questions Answered Every Seconds. Real Estate, Family Law , Estate Planning, Business Forms and Power of Attorney Forms.

In corporate law , an indemnity agreement serves to hold Board Directors and company executives free from personal liability if the company becomes sued or suffers damages. The term refers to both the pre-loss guarantee of compensation and the compensation itself. The most common type of indemnity is insurance. Insurance is a form of indemnification. The enforceability of indemnity agreements is a battle that will likely ignite, if construction litigation arises.

This article is intended to map out the legislative landscape of indemnity statutes across the country, as a resource to determine whether the indemnification provision in your construction contract is enforceable. The English law definition of a contract of indemnity is – “it is a promise to save a person harmless from the consequences of an act”. Thus it includes within its ambit losses caused not merely by human agency but also those caused by accident or fire or other natural calamities.

Therefore, indemnity clauses are often the focus during contract negotiations. The meaning of indemnity clauses differs depending on individual situations and the contract itself. In a legal sense, it may also refer to an exemption from liability for damages.

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Find in seconds. Phrase the warranty to clearly state indemnity only over the factors you truly wish to be responsible for and can somewhat control. Consider including indemnities for breach of contract and negligence in addition to the existing common law rights. The indemnification and liability under the indemnity arises automatically, by operation of law.

When an indemnity clause appears in a contract, it’s standalone contractual promise which gives rise to the claim. It gives a better measure of recovery for loss than what would be available in the general law of damages. An indemnity commonly appears in the form of a clause or provision in a legal contract.

An indemnification provision in a contract is a very important commitment, because the indemnitor is foregoing, or surrendering, their ordinary right under the law to sue the indemnitee to recover a loss. By Sumit Kumar Suman, CNLU. Additionally, the parties can enter into a unilateral indemnity obligation if one party agrees to indemnify the other but does not promise reciprocal indemnity , as long as the insurance agreement is in writing and does not exceed $50000.

How to use indemnity in a sentence. Indemnity definition is - security against hurt, loss, or damage.