Template:Indemnity description: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "An indemnity is a useful back-up to a guarantee because: *The Statute of Frauds does not apply to an indemnity. *The invalidity of an underlying obligation doe..." |
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An [[indemnity]] is a useful back-up to a [[guarantee]] because: | 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: | |||
*The [[Statute of Frauds]] does not apply to an [[indemnity]]. | *The [[Statute of Frauds]] does not apply to an [[indemnity]]. | ||
*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) | *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 /> | ||
Revision as of 12:15, 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)