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ARTICLE · 09 JULY 2017

The dreaded indemnity clause

Bartier Perry Solicitors
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An indemnity clause in a contract should be negotiated to determine which party is best placed to bear associated risks.

AustraliaFinance and Banking
Bruno Confalone (Formerly With Bartier Perry)
Bruno Confalone (Formerly With Bartier Perry)
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The indemnity clause is usually the most contested clause in any contract negotiation including in property transactions.

This is understandable.

After all, the ultimate effect of an indemnity clause is either to reaffirm or to alter the common law or statutory position in relation to the recovery of damages. This can be seen in various situations including leases and licences, transactions involving contaminated land and terms regarding incidents arising from the use of easements.

What is the basic premise of an indemnity clause?

Although it is often a point of contention, the basic premise of negotiating an indemnity clause is to determine which party is best placed to bear the risks associated with the matter at hand.

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