Indemnity
Indemnity is a legal obligation to compensate someone for damages or losses suffered as a result of negligence or breach of duty. It is a sum of money paid to a person who has been harmed, either financially or physically, by the actions of another person.
Types of Indemnity:
1. Express Indemnity:– Occurs when a person agrees to indemnify another person for specified damages or losses.- Examples: Contracts, warranties, and insurance policies.
2. Implied Indemnity:– Arises from certain legal relationships, such as employer-employee and landlord-tenant.- Examples: Employment law, product liability.
Elements of Indemnity:
- Damages: The amount of compensation owed for the harm suffered.
- Causation: The negligent act that caused the harm.
- Foreseeability: The likelihood of harm occurring.
- Duty of Care: The obligation of the indemnitor to act with reasonable care.
Examples:
- A car manufacturer may indemnify a customer for damages caused by a defective vehicle.
- An employee may indemnify their employer for damages caused by their negligence.
- A landlord may indemnify a tenant for damages caused by a fire.
Legal Basis:
Indemnification is based on the principles of negligence and breach of duty. According to these principles, a person who owes a duty of care to another person and breaches that duty, may be held liable for any resulting damages.
Note:
Indemnity is a complex legal concept and the specific legal obligations and remedies may vary depending on jurisdiction. It is always recommended to seek legal advice in specific cases.
FAQs
What is the basic concept of indemnity?
Indemnity is a promise to compensate for losses or damages.
What is an example of indemnity?
In property insurance, the insurer compensates the policyholder for damage, like fire loss.
What are the two types of indemnity?
Express indemnity (written in contracts) and implied indemnity (assumed by relationships).
What is indemnity in contract law?
Itโs a contract clause where one party agrees to cover specific losses of the other.
What is an indemnity payment?
Itโs a payment made to cover a loss or damage.
