Crafting Indemnity/Warranty Clauses

We tend to find provisions for indemnity and / or warranty In most of the commercial and transactional agreements.

Both of these provisions are intended to protect a party receiving such indemnity and / or warranty from any costs, economic risks and liabilities. Even though the intent under both these provisions is to protect such party, there is a difference in the way both these provisions operate.

Indemnity is way of mitigating any potential risk on one party, whereby the indemnitor (i.e., party providing indemnity) assures the indemnitee (i.e., party receiving indemnity) that the latter will be compensated or protected from certain defined set of risks and liabilities that could emerge from a specific event or circumstance.