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ARTICLE · 12 NOVEMBER 2025

The case for indemnities - How they work in practice

Bartier Perry Solicitors
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Indemnity clauses are useful but draft them carefully as courts interpret them narrowly & in favour of the indemnifier; balanced & clearly worded clauses are best.

AustraliaCorporate/Commercial Law
Rebecca Hegarty
Rebecca Hegarty
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Indemnity clauses are often used in contracts to define who bears risk. They are a promise by one party to cover the costs or loss incurred by the other party as a result of certain events.

It is important when wording or negotiating an indemnity to consider how wide the clause is, whether it will be effective, and even if one is needed at all.

Different form, different wording

Indemnity clauses can take different forms. For example:

  • A indemnifies B against all losses that B may suffer except those arising out of B's own acts and omissions
  • A indemnifies B against any liabilities and claims made by a third party that is in any way related to the contract
  • A indemnifies B against any losses B may suffer if C fails to make payment

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