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Template:Indemnitycapsule: Difference between revisions
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Under an [[indemnity]] one party agrees to reimburse the other for specified losses it incurs in performing the {{tag|contract}}, even though they don’t arise from [[breach of contract]]. | Under an [[indemnity]] one party agrees to reimburse the other for specified losses it incurs in performing the {{tag|contract}}, even though they don’t arise from [[breach of contract]]. This is a fair allocation of loss if one party may incur definable losses which, [[but for]] its obligations to the indemnifying party under the contract, it would not. For example, a retrospective [[tax]] imposed unexpectedly upon a custodian by dint of its holding a client asset. But that is much more unusual that the incidence of an unnecessary [[indemnity]] in a standard form {{t|contract}}. Most of the time the remedies developed over centuries of the [[common law]] of {{t|contract}} do just fine. Since [[indemnities]] reallocate losses away from those on whom they would naturally fall, and are apt to short-circuit sensible limitations on contractual liability (also developed over said centuries), one should resist [[indemnities]] where they are not absolutely necessary. Which is most of the time. | ||