Importance of Indemnity Contracts

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FINAL DRAFT ON THE TOPIC OF
IMPORTANCE OF
INDEMNITY CONTRACTS

INDEX

S.NoPARTICULARSPAGE.No
1.INTRODUCTION5
2.ENFORCEMENT8
3.INDEMNITY IN IPR10
4.REASONS FOR NOT GIVING INDEMNITY IN IPR12
5.FINDINGS13
6.CONCLUSION14


TITLE – IMPORTANCE OF INDEMNITY CONTRACTS
OBJECTIVE- TO FIND OUT THE RELEVANCE OF INDEMNITY CONTRACTS IN INDIA AND OTHER COUNTRIES THROUGH PROPER ANALYSIS SCOPE – IT IS A DOCTRINAL RESEARCH

INTRODUCTION

The concept of indemnity is based on a contractual agreement made between two parties, in which one party agrees to pay for potential losses or damages caused by the other party. A typical example is an insurance contract, whereby one party (the insurer) agrees to compensate the other (the insured) for any damages or losses, in return for premiums paid by the insured to the insurer.

Indemnity may be paid in the form of cash, or by way of repairs or replacement, depending on exactly what is spelled out in the indemnity agreement. For example, in the case of home insurance, the homeowner pays insurance premiums to the insurance company in exchange for the peace of mind of knowing that he or she will be indemnified if the house sustains damage from fire, natural disasters or other perils specified in the insurance agreement. In the unfortunate event that the home is damaged significantly, the insurance company will undertake to bring it back to its original state, either by means of repairs undertaken by its authorized contractors, or by reimbursing the homeowner for expenditures incurred in association with such repairs.

Indemnification is the act of being held not liable or being protected from costs by shifting them to another party. Certain actions almost always include an indemnity agreement. Tenants signing a lease often agree to indemnify the owner of the property from costs or damages associated with being harmed on the property. This indemnity agreement normally has an additional clause that states the property owner must fix anything that could be potentially dangerous. Thus a landlord would be indemnified from damages if a tenant tripped and fell down the stairs. However, if the stairs were in disrepair, and this matter had been brought to the attention of the landlord, an indemnity agreement would not prevent the renter from suing for damages if the disrepair caused the accident.

Tenants usually further agree to be held responsible for costs if the property is damaged. Agreeing to clean the carpets or flea bomb an apartment upon vacating the property is an indemnity agreement that protects the property owner. Deposits may be not be returned when a tenant fails to meet obligations stated in an indemnity agreement.

Sometimes an indemnity agreement is signed when people use a company to invest in stocks or bonds trading. In order to use the company’s services, the investing person agrees to hold the company not liable for any money losses that might be incurred by investing.

Occasionally one uses an indemnity agreement when intellectual property is leased. This is much like the tenant indemnification agreement. The holder of the intellectual property seeks exemption for any damages incurred by the person using the property. The leaser also agrees to take on any lawsuits that result from his or her use of the property.

IMPORTANCE OF INDEMNITY CONTRACTS
The importance of indemnity provisions At its simplest, an indemnity is a provision which deems one party harmless for the actions or inactions of another or others or in specified circumstances. It is a contractual clause which allocates risk. Indemnities are used to manage risk by expanding the scope of recovery to which a party may have recourse in respect of agreed matters, such as property damage or breach of contract. Indemnities often raise red flags in construction contract reviews and negotiations. Properly used, indemnities are an important tool for risk...
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