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KembaraXtra – Legal Terms – Indemnity
An indemnity is a contractual promise by one party to compensate another for loss or liability arising from specified circumstances. Unlike a guarantee, an indemnity allows the indemnified party to recover directly from the indemnifier without first pursuing a third party who caused the loss.
Indemnities are widely used in commercial contracts to allocate risk, particularly in relation to third-party claims such as intellectual property infringement. They offer broader protection than ordinary damages claims, as there is no duty to mitigate loss and recovery is generally easier and more comprehensive.
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