Template:Liability carveouts for indemnities

An indemnity is the one time in a contract that it makes sense to exclude liability for negligence, fraud or wilful default, a contractual standard which otherwise, as you'll see in that article, seems to be a product of muddy thinking. Generally the standard of conduct one must be held to in a contract is, of course, the contractual one. But where an indemnity is concerned, one party has agreed to assume liability for the other's loss even though the indemnifying party has not breached the contract or even acted foolishly in any way. And nor the fact that indemnified party has itself performed the contract the end of it: The loss in question arises through the agency of some third party, away from the contract in which the indemnity lies. (A loss as between the two parties to the contract would be governed by the law of contract and breach).

Hence an indemnifying party will want to restrict its liability under the indemnity to losses in the incurrence of which the indemnified party has not been negligent, fraudulent or wilfully in default of its obligations, in contract or in tort, to anyone in the world.