Template:Indemnity description: Difference between revisions
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An {{tag|indemnity}} is no ''better'' than a contractual claim. It ''is'' a contractual claim. It does not have a harsher accounting impact. Its [[regulatory capital|capital]] treatment is the same. You enforce it as you would a breach of contract: by suing the [[indemnifier]] for its failure to pay the indemnified amount. Since (if well crafted) it is a claim to pay a pre-defined (or at any rate [[deterministic]]) sum, proving your claim is not hard and a well-crafted indemnity is apt for [[summary judgment]]. But careful, counsel: aptness for summary judgment is not a magic property of all indemnities: it depends on how well you crafted yours. | An {{tag|indemnity}} is no ''better'' than a contractual claim. It ''is'' a contractual claim. It does not have a harsher accounting impact. Its [[regulatory capital|capital]] treatment is the same. You enforce it as you would a breach of contract: by suing the [[indemnifier]] for its failure to pay the indemnified amount. Since (if well crafted) it is a claim to pay a pre-defined (or at any rate [[deterministic]]) sum, proving your claim is not hard and a well-crafted indemnity is apt for [[summary judgment]]. But careful, counsel: aptness for summary judgment is not a magic property of all indemnities: it depends on how well you crafted yours. | ||
=====It | =====It does ''not'' require a breach of contract===== | ||
Meanwhile, note a point of profound importance. While failing to honour an indemnity claim is a contractual breach, the circumstances giving rise to one is not. One need allege no breach and prove no loss to make a claim under a (well-crafted) indemnity. No [[causation]] is required, no value judgment needed to satisfy the [[indemnifier]] of your bona fides: all you need prove is: | Meanwhile, note a point of profound importance. While failing to honour an indemnity claim is a contractual breach, the circumstances giving rise to one is not. One need allege no breach and prove no loss to make a claim under a (well-crafted) indemnity. No [[causation]] is required, no value judgment needed to satisfy the [[indemnifier]] of your bona fides: all you need prove is: | ||
*There is an [[indemnity]] | *There is an [[indemnity]] | ||
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*You have demanded the [[indemnified sum]] from [[indemnifier]]; and | *You have demanded the [[indemnified sum]] from [[indemnifier]]; and | ||
*The [[indemnifier]] has not paid it. | *The [[indemnifier]] has not paid it. | ||
=====It is not (necessarily) of indeterminate scope===== | =====It is not (necessarily) of indeterminate scope===== | ||
Nor is a (well-crafted) {{tag|indemnity}} broader or of less determinate scope than any other contractual claim. It might be to reimburse taxes incurred in performing the contract, or a similar unavoidable expense that would not arise but for the contract. It should have a predictable financial consequence: an indemnity is a precision tool for a narrow risk, not a weapon of mass destruction. The sky should not fall in under the weight of a well-proportioned {{tag|indemnity}}. | Nor is a (well-crafted) {{tag|indemnity}} broader or of less determinate scope than any other contractual claim. It might be to reimburse taxes incurred in performing the contract, or a similar unavoidable expense that would not arise but for the contract. It should have a predictable financial consequence: an indemnity is a precision tool for a narrow risk, not a weapon of mass destruction. The sky should not fall in under the weight of a well-proportioned {{tag|indemnity}}. | ||