Template:Indemnity description: Difference between revisions

===What a (well-crafted) indemnity is not===

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.

Now. 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: prove you have the contract, prove you’ve suffered the loss and—''that’s it''. A well-crafted indemnity is therefore apt for [[summary judgment]]<ref>[[summary judgment]] is a speedy civil court process where you have have a court award your claim without out all that messy and unpleasant business mucking around calling witnesses and so on.</ref>. But careful, [[Mediocre lawyer|counsel]]: aptness for [[summary judgment]] is not a [[magic]] property of all [[indemnities]]: it depends on how well you have crafted yours.

While ''failing to honour'' an [[indemnity]] claim is a [[breach of contract]], the circumstances giving rise to an [[indemnity claim]] in the first place are ''not''. No breach is required, no [[causation]] or value judgment needed to satisfy the [[indemnifier]] of your ''[[bona fide]]s''. Recovering for failure to honour a (well-crafted) [[indemnity]] is therefore straightforward: You must show the event giving rise to the indemnity has happened, that you have demanded the [[indemnified sum]] from [[indemnifier]]; and that the [[indemnifier]] has not paid it. Hence: [[summary judgment]].

Note, also, that [[summary judgment]] ''is'' available for certain contractual breaches: Specifically, failures to pay a specified sum, where the obligation to pay can be proved by contract, and the failure to pay can be proven by affidavit. No real question of witness credibility arises.

Nor is a (well-crafted) {{tag|indemnity}} broader or of less determinate scope than any other contractual claim. A good one should have a predictable and reasonable financial consequence: It might be to reimburse taxes or similar unavoidable expenses a merchant incurs in performing the contract, that it would not, but for that contract. The [[Chicken Licken|sky should not fall in]] under the weight of a well-proportioned {{tag|indemnity}}.