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Indemnity: Difference between revisions
→Scope of losses
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===Scope of losses=== | ===Scope of losses=== | ||
*'''Direct losses as a result of Breach''': Needless to say, an indemnity is '''not''' required from a party to recover direct losses suffered as a result of breach of contract by that party: the innocent party has an ordinary action available for breach of contract. | *'''Direct losses as a result of Breach''': Needless to say, an indemnity is '''not''' required from a party to recover direct losses suffered as a result of breach of contract by that party: the innocent party has an ordinary action available for breach of contract. | ||
*'''Other losses suffered by the Indemnified Party: Indemnities may cover "consequential losses" incurred by a party arising out of a breach of contract by the indemnifying party, or they may be quite unrelated to any action of the indemnifying party. However, the latter case opens the indemnifying party up to significant and indeterminate liability and it would be well advised to resist giving such an indemnity. | *'''Other losses suffered by the Indemnified Party''': Indemnities may cover "consequential losses" incurred by a party arising out of a breach of contract by the indemnifying party, or they may be quite unrelated to any action of the indemnifying party. However, the latter case opens the indemnifying party up to significant and indeterminate liability and it would be well advised to resist giving such an indemnity. | ||
===See also=== | |||
*[[consequential loss]] | |||
*[[indemnifying party]] | |||
*[[indemnified party]] | |||
{{anatomybar}} | |||
{{c2|Damages|Contract}} | |||
===Common Restrictions=== | ===Common Restrictions=== | ||
Generally indemnities are limited to things that are actually in control of the [[indemnifying party]] (and things it is obliged to do under the contract). In the agency context it is reasonable for a principal to indemnify an agent for losses it suffers as a result of non-negligently performing its obligations under the contract upon the instructions of the principal. | Generally indemnities are limited to things that are actually in control of the [[indemnifying party]] (and things it is obliged to do under the contract). In the agency context it is reasonable for a principal to indemnify an agent for losses it suffers as a result of non-negligently performing its obligations under the contract upon the instructions of the principal. | ||