indemnity

In the context of contracts, an indemnity clause is a promise to make good the loss sustained by a person as a consequence of an act or omission of another - it is an express promise to compensate for defined loss or damage are used to contracts (in addition to warranties) to ensure that a contracting party has an express remedy to correct defects in goods or services delivered under the contract. Without an indemnity, a person will be left with their usual rights for breach of contract to recover the specified loss, if on the construction of the agreement relief is available.

The value of an indemnity is in the avoidance of difficulties with remoteness of damage when recovering loss when properly drafted.

Usage: The indemnity allowed the innocent party to recover their losses of conduct causing it to infringe the intellectual property rights of third parties.

Related Words: entire agreement clause.