What is an indemnity clause in a contract?

“To indemnify” means to compensate someone for his/her harm or loss. In most contracts, an indemnification clause serves to compensate a party for harm or loss arising in connection with the other party’s actions or failure to act. The intent is to shift liability away from one party, and on to the indemnifying party.

Do indemnity clauses hold up in court?

Court will not enforce an indemnification provision that indemnifies an indemnitee for its own negligence “unless the intention of the parties is clearly and unambiguously expressed.” Courts first look for specific language in the contract that address the fault or negligence of the indemnitee.

Is an indemnity clause necessary?

The most important part of an indemnification clause is that it protects the indemnified party from lawsuits filed by third parties. This protection is important because damaged parties are still able to pursue compensation for their losses even if this clause isn’t in the contract.

What if there is no indemnification clause?

An indemnification clause is not mandatory for a contract to be valid. If there is no indemnification clause, then the parties will not be entitled to any contractual indemnification.

Is indemnity good or bad?

“Indemnity” refers to a duty to make good any loss, damage, or liability incurred by another. “Indemnification” refers to the actual act of compensating for such loss or damage. When you see either of those words in a contract, they likely refer to the idea that liability is being shifted from one party to the other.

How do you write an indemnity clause?

“[Company/Business/Individual Name] shall fully indemnify, hold harmless and defend _______ and its directors, officers, employees, agents, stockholders and Affiliates from and against all claims, demands, actions, suits, damages, liabilities, losses, settlements, judgments, costs and expenses (including but not …

How do you negotiate an indemnity clause?

In negotiating indemnities, it is important to review the clause carefully to understand when the indemnity kicks in and what the scope of the liability is. This will help a party decide if the indemnity is acceptable, or if it needs to be finessed to make it fair for all parties involved.

How do indemnity clauses work?

Indemnity clauses are written into contracts to allow an indemnifier to take on any losses incurred by a party in the contract. They can also be used to absolve the indemnifier or the other party of liability if a breach of contract occurs, or damages/loss of goods are incurred.

What do you need to know about landlord indemnification clauses?

Landlord Indemnification Sample Clauses. In the event that any action or proceeding is brought against Tenant, and the foregoing indemnity is applicable to such action or proceeding, then Landlord, upon notice from Tenant, shall resist and defend such action or proceeding by counsel reasonably satisfactory to Tenant.

Can a landlord indemnify a tenant from a negligence claim?

To the fullest extent permitted by Applicable Requirements, Landlord shall indemnify and hold Tenant and the other Tenant Parties harmless of and from Claims arising out of or in connection with, or related to the gross negligence or willful misconduct of Landlord or Landlord Parties.

What is an indemnity and hold harmless agreement?

The foregoing indemnity and hold harmless agreement shall include indemnity for all costs, expenses and liabilities ( including, without limitation, reasonable attorneys ’ fees and disbursements) incurred by Tenant in connection with any such claim or any action or proceeding brought thereon, and the defense thereof.

Can a landlord require a tenant to assume the landlord’s defense?

Landlord may, at its option, require Tenant to assume Landlord’s defense in any action covered by this Section 10.2 through counsel reasonably satisfactory to Landlord.