indemnity

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Indemnity

Recompense for loss, damage, or injuries; restitution or reimbursement.

An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. The right to indemnity and the duty to indemnify ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage.

Cross-references

Damages.

indemnity

n. the act of making someone "whole" (give equal to what they have lost) or protected from (insured against) any losses which have occurred or will occur. (See: indemnify)

indemnity

an undertaking by one person to make good losses suffered by another. Frequently confused with guarantee, an indemnity is a primary obligation that is enforceable irrespective of whether the beneficiary could sue the person responsible for causing the loss. On the other hand, a guarantee is a secondary obligation to pay a specified or ascertainable sum should the primary debtor fail to do so; if the primary obligation is unenforceable, the guarantee cannot be sued upon. An agent has the right to be indemnified by his principal against all losses and liabilities incurred by him while acting within the scope of his agency.

INDEMNITY. That which is given to a person to prevent his suffering damage. 2 McCord, 279. Sometimes it signifies diminution; a tenant who has been interrupted in the enjoyment of his lease may require an indemnity from the lessor, that is, a reduction of his rent.
     2. It is a rule established in all just governments that, when private property is required for public, use, indemnity shall be given by the public to the owner. This is the case in the United States. See Code Civil, art. 545. See Damnification.
     3. Contracts made for the purpose of indemnifying a person for doing an act for which he could be indicted, or an agreement to, compensate a public officer for doing an act which is forbidden by law, or omitting to do one which the law commands, are absolutely void. But when the agreement with an officer was not to induce him to neglect his duty, but to test a legal right, as to indemnify him for not executing an execution, it was held to be good. 1 Bouv. Inst. n. 780.

References in periodicals archive ?
The specific indemnity clause stated: "[t]o the extent the Loss is caused, in part, by the joint, concurrent or contributory negligence of G-P, its agent or employees, Contractor shall provide said indemnification to the extent or degree Contractor is the cause of or liable for the Loss." Id.
However, the interplay between indemnity clauses and insurance requirements rarely weave together.
The court found that the indemnity clause would cover the costs of legal fees in other situations; for example, criminal charges arising out of publication of allegedly obscene material, assault charges against an editor who had broken up a fight in the newsroom, and (in the case of a lorry driver rather than an editor) charges of careless or dangerous driving.
There arc four basic levels of indemnity clauses, which run the gamut from extremely tough to moderately onerous, to quite lenient, all the way down to unintelligible/unenforceable.
Many of the bank-customer contracts contain indemnity clauses to protect the banks from liabilities arising from money-laundering by and illegal activities of their customers.
Also similar to the facts in Warkocz, the facts in Gurtz revealed that no indemnity clause protected the ex-wife's entitlements to the servicemember's disposable retired pay in the event the servicemember chose to waive a portion of his military retired pay.
If an individual was unaware, and/or did not include one of the two required statements in the contract and bid documents or specifications, the indemnity clause was unenforceable.
Another example of an indemnity clause is the following:
Presumably, contract drafting and negotiating costs would increase, because they would cover an indemnity clause.
Yet critics, who include members of Congress and EPA officials, say the EG&G indemnity clause sets an unnecessary precedent that could cost the country billions if adopted in future cleanup contracts.