Indemnity clauses are often added to contracts in order to
transfer risk from one party to the other in the case of a specific
event.
In other words, Party B agrees to keep Party A
'unharmed' from loss or damage.
All types of contracts can include indemnity clauses including
land, construction, manufacturing, business, leases, sale of goods
and service agreements.
In this article we explore the reasons why such indemnity
clauses are used, the different types of indemnities, how they
differ from warranty clauses and also things to consider when
drafting the clauses.
Why employ them?
When one party fails to comply with its obligations under a
contract, the other party may be entitled to damages that would
leave them in the same position they would have been in had the
contract been performed as originally intended by the parties.
