Template:Indemnity description: Difference between revisions
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An {{tag|indemnity}} is an undertaking by an | An {{tag|indemnity}} is an undertaking by an [[indemnifying party]] to compensate an [[indemnified party]] for losses the [[indemnified party]] suffers beyond those arising as a direct consequence of the [[indemnifying party]]'s failure to perform its obligations under the contract containing the [[indemnity]]. Indemnities are generally viewed as onerous obligations. A request for one will often be met with a sharp intake of breath.<br /> | ||
An [[indemnity]] is nonetheless a useful back-up to a [[guarantee]] because: | An [[indemnity]] is nonetheless a useful back-up to a [[guarantee]] because: | ||
Revision as of 12:16, 23 December 2015
An indemnity is an undertaking by an indemnifying party to compensate an indemnified party for losses the indemnified party suffers beyond those arising as a direct consequence of the indemnifying party's failure to perform its obligations under the contract containing the indemnity. Indemnities are generally viewed as onerous obligations. A request for one will often be met with a sharp intake of breath.
An indemnity is nonetheless a useful back-up to a guarantee because:
- The Statute of Frauds does not apply to an indemnity.
- The invalidity of an underlying obligation does not invalidate an indemnity.
- Variation of the terms of an underlying obligation will not discharge an indemnity whereas it might a guarantee (unless you have a good waiver of defences clause)