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In an attorney's miserable existence, few things are more apt to excite the animal spirits than | ===Of the Animal Spirits=== | ||
In an attorney's miserable existence, few things are more apt to excite the animal spirits than an indemnity. Why so, you might ask, for an indemnity is nothing more than a promise to pay a defined sum should a pre-agreed circumstance arise? | |||
Indeed so, if used as the Lord* intended. An indemnity is a sensible way perhaps the only way - to allocate third-party risks two merchants might encounter in agreeing to provide one another goods and services. | |||
{{box|An indemnity is nothing more than a contractual promise to pay a defined sum should a pre-agreed circumstance arise.}} | {{box|An indemnity is nothing more than a contractual promise to pay a defined sum should a pre-agreed circumstance arise.}} | ||
But the indemnity has | But, in the hands of finance lawyers, the {{tag|indemnity}} has taken on a life of its own. Rather than prudently allocating unwanted outcomes, indemnities are seen, by those who claim them, as [[smart bombs]] that will assassinate all evil, whilst vouchsafing loved ones to the bosom of the Earth. To those asked to provide them, indemnities have the hue of the closing stages of a Joseph Conrad novel. There is much misapprehension. Much Horror. Much Fear. Much Loathing. | ||
Much ignorance. | Much ignorance. | ||
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*The invalidity of an underlying obligation does not invalidate 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) <br /> | *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) <br /> | ||
*A ''law'' lord, that is. |