Equal indemnity clause

What is indemnity clause? The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s gross negligence, willful misconduct or bad faith.

Indemnity Clauses in Contracts. The event might lead to special risk or exposure that justifies special attention. The extent of the risk might be unknown, and not even be capped by an exclusion of liability in the contract.

A note on indemnity clauses in commercial contracts, focusing on the law and commercial needs that shape their drafting. It also suggests an approach to negotiating and drafting an indemnity clause , and the rules of interpretation as they apply to indemnities, with particular reference to words and phrases commonly used in indemnity clauses. A mutual indemnity clause (also known as a cross indemnity or knock-for- knock indemnity) is one where each party agrees to hold harmless the other party against certain losses for a breach of. Specifically, an indemnity clause states the conditions under which one party has to compensate the other contractual party for claims , unintentional harms , or other liability that could befall the indemnified party (i.e., the one to be compensated).

This is usually due to the fault of the indemnifying party. An indemnity clause is a statement that one party will ‘indemnify’ the other for all the losses and expenses that arise from a certain event, usually a breach of the agreement. This can include consequential losses and the costs incurred to rectify any harm done, for example legal fees and other professional costs.

In these clauses, one party will indemnify the other party for all loss or liability related to.

A boilerplate indemnity clause giving indemnity wording for use in a commercial contract. For example, in California indemnification clauses do not cover certain risks unless the risks are listed in the contract, while in New York a brief clause , X shall defend and indemnify Y for all claims arising from the Product does make X responsible for all claims against Y. The Court of Appeal unanimously agreed with Mr Wood’s interpretation and construction of the indemnity clause and found that, properly construe the indemnity was limited to loss caused by mis-selling where such loss followed or arose from a customer complaint or a complaint registered with the FSA or other relevant authority. Commercial contracts typically include an indemnity clause among other standard terms (also known as boilerplate clauses ). Words such as “hold harmless”, “defend”, “make good” or “compensate” often indicate the clause is, in effect, an indemnity clause. The right to indemnity and the duty to indemnify ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage. An indemnity is the closest thing the law has to a blank cheque to recover financial loss.

If you work with a lot of contracts, you may already know that most contracts include an “ indemnification ” clause. This is essentially an “I’ll protect your back” clause , making the. The most important tip for drafting an effective indemnity is to ensure that the clause is worded to suit the particular circumstances of the contracting parties. If there is a dispute about the operation of a contractual indemnity , the balance of the contract will help to identify how the indemnity operates. When interpreting a contractual indemnity clause , the court will consider its meaning from the point of view of a reasonable person.

The indemnity clause is not mutual and balance however, when the indemnity does not apply to both parties equally. Often, this will look like the “first way” above, but without the corresponding reciprocal paragraph for the other party. By contrast, if the clause is an indemnity against liability then it may be that the cause of action will arise when liability is incurre not when it is later ascertained.

The distinction between the two types of indemnity may be opaque and clause 17(4) does not set out a clear description of the detriment (or of the errors and so on) that it is intended to capture. The document's interpretation will therefore depend on what a reasonable person would consider at the time the indemnity was agree if it along with the other party to the contract had the same background information reasonably available to them.

Insurance clauses in contracts are a vital part of any agreement. A recent UK Supreme Court case concerning the meaning of an indemnity clause provides useful guidance for commercial parties in contract drafting and interpretation. It reaffirms the modern approach to interpreting contracts, which gives primacy to the text of an agreement while also recognising the role that the context plays.

If an indemnity clause is interpreted in this way, the indemnified party will have a claim under the contract for the sum payable under the indemnity (ie. an action for the recovery of a debt) as opposed to a claim for damages for breach of contract. The insurance clause , or the insurance in place because of this requirement, provides some guarantee that the entity will have the financial wherewithal to meet their indemnity obligations, if any should arise.