Template:Indemnity description: Difference between revisions

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In an attorney's miserable existence, few things are more apt to excite the animal spirits than the request of an indemnity. Yet an indemnity is nothing more than a contractual promise to pay a defined sum should a pre-agreed circumstance - not being a breach of contract - arise. If used as the law lords intended, it can be a sensible way to allocate third-party risks that parties take on in agreeing to provide services to each other.  
===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 suffered a bit of continental drift at the hands of inexpert lawyers. An indemnity is now seen, by those who believe they're entitled to one, as a kind of smart bomb that will assassinate all evil, whilst vouchsafing loved ones to the bosom of the Earth. To those asked to provide one, on the other hand, an indemnity has the hue of the closing stages of a Joseph Conrad novel. There is much misapprehension. Much Horror. Much Fear. Much Loathing.  
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.
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