Template:Indemnity description: Difference between revisions

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[[Contractual damages]] are limited only by the depraved imagination of your lawyer: [[loss of bargain]], [[loss of opportunity]], [[consequential loss]], [[tax]]es, [[reputational damage]], [[restitution]], [[hedge]]-breakage costs, [[emotional distress]], [[nervous shock]], (needless to say, but inevitably said) legal costs and, if that is not enough, [[aggravated damages]] to compensate for the mental distress of having ones expectation’s cruelly forsaken — in our time of [[snowflake|snowflakery]], undoubtedly a vibrant head of recovery.<ref>But not [[exemplary damages|''exemplary'' damages]], which are not available at contract, [[as any fule kno]].</ref> Nebulous as they are, such allegations at least require evidence, and the law has developed techniques — [[causation]] and [[remoteness of damage]] — to limit unnecessary excess.
[[Contractual damages]] are limited only by the depraved imagination of your lawyer: [[loss of bargain]], [[loss of opportunity]], [[consequential loss]], [[tax]]es, [[reputational damage]], [[restitution]], [[hedge]]-breakage costs, [[emotional distress]], [[nervous shock]], (needless to say, but inevitably said) legal costs and, if that is not enough, [[aggravated damages]] to compensate for the mental distress of having ones expectation’s cruelly forsaken — in our time of [[snowflake|snowflakery]], undoubtedly a vibrant head of recovery.<ref>But not [[exemplary damages|''exemplary'' damages]], which are not available at contract, [[as any fule kno]].</ref> Nebulous as they are, such allegations at least require evidence, and the law has developed techniques — [[causation]] and [[remoteness of damage]] — to limit unnecessary excess.


Now any economist will tell you there can be undesirable consequences of commercial activity, that neither party wants, nor can avoid, even if each keeps faithfully to the bargain. For these “externalities” we have [[indemnities]]. They allocate these risks ''away from the person on whom they would naturally fall''. One should therefore approach the request for an indemnity, with caution. Your first question should always be “''why''”: ''Why shouldn't this loss fall on the fellow who would ordinarily bear it?''
Now any economist will tell you there can be undesirable consequences of commercial activity, that neither party wants, nor can avoid, even if each keeps faithfully to the bargain. For these “externalities” we have [[indemnities]]. They allocate these risks ''away from the person on whom they would naturally fall''. One should therefore approach the request for an indemnity, with caution.  


If it would, and it should, you don’t need an {{t|indemnity}}.  
Your first question should always be “''why''”: Why ''shouldn’t'' this loss fall on the fellow who would ordinarily bear it? If it would, and it ''should'', you don’t need an {{t|indemnity}}.  


If it would but it shouldn’t, consider how well you can articulate the risk and likely loss? If you can describe it with minute precision, all well and good: your counterparty might be minded to accept: if you have no more than a faintly discomfiting sense that [[Chicken Licken|the sky might fall on your head]] when performing the contract, and you want to be indemnified for that, expect a stouter challenge.  
If it would but it shouldn’t, consider how well you can articulate the risk and likely loss? If you can describe it with minute precision, all well and good: your counterparty might be minded to accept: if you have no more than a faintly discomfiting sense that [[Chicken Licken|the sky might fall on your head]] when performing the contract, and you want to be indemnified for that, expect a stouter challenge.  
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=====An {{tag|indemnity}} does ''not'' require a [[breach of contract]]. In fact they should be ''mutually exclusive''=====
=====An {{tag|indemnity}} does ''not'' require a [[breach of contract]]. In fact they should be ''mutually exclusive''=====
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]].
{{indemnity for breach of contract capsule}}
 
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.
 
=====An {{tag|indemnity}} is ''not'' (necessarily) of indeterminate scope=====
=====An {{tag|indemnity}} is ''not'' (necessarily) of indeterminate scope=====
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}}.  
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}}.