Search results
An insurance policy that compensate a party for any accidental damages or losses up to a certain limit usually the value of the loss of itself is known as indemnity insurance. Essentials to a contract of Indemnity: There must be two parties. One of the parties must promise the other to pay for the loss incurred.
According to the Indian Contract Act, 1872, Section 124 which provides that “a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a „Contract of Indemnity‟.” It basically comprises of two parties: Indemnifier .
- 311KB
- 4
- Introduction
- Contract of Indemnity : An Overview
- Objective and Nature of The Contract of Indemnity
- Conditions For The Contract of Indemnity
- Legislative and Judicial Enactments of Contract of Indemnity Under English Law
- Position of A Contract of Indemnity in England and India
- Legislative and Judicial Enactments of Contract of Indemnity Under Indian Law
- Essentials and Rights in The Contract of Indemnity
- Commencement of Liability Under The Contract of Indemnity
- Types of The Contract of Indemnity
You might be aware of the basic rule that whoever harms or causes injury to another person has to pay the damages or costs to the injured person. The kings in a primitive society ruled on this principle. Whenever they had to deal with such cases where one party caused damage to the other, they made him liable to pay costs or damages. The contract o...
The word indemnity has been derived from the Latin term “indemnis” which means unhurt or free from loss. As we all know, the fundamental idea behind an indemnity or indemnification is to transfer some or all of the liability from one party to another. This means that one party to the contract, referred to as the “indemnifier” or “indemnifying party...
The purpose of entering into a contract of indemnification is to safeguard the promisee from unforeseen losses. A contract for indemnity may be expressed or implied. In other words, parties may directly impose their own conditions in such a contract. The nature of circumstances may also create indemnity obligations impliedly. A contract of indemnit...
Parties to the contract of indemnity
As mentioned above, there must essentially be two parties in a contract of indemnity: the indemnity holder and the indemnifier. Moreover, no individual can enter into a contract with themselves, and the minimum requirement for any contract to be legally valid is for two parties. Additionally, these parties must have the capacity to contract. However, depending on the circumstances, there may be more than two parties.
Lawful object and consideration
A contract for indemnity can only be executed for a valid purpose and a lawful consideration. A contract of indemnity cannot be construed as a contract to engage in unlawful behaviour or conduct that is against public policy.
Basically, a contract of indemnity is a more extensive idea in English law when contrasted with Indian law, in light of the fact that in English law every one of the issues is viewed which are connected not just due to the demonstrations of some individual yet additionally emerges from some occasion or mishap if there should arise an occurrence of ...
England
The word “indemnity” is used in a wider sense under English law. It includes a contract or promise to save a person from losses caused by humans, agencies, or any other event like accidents that are not under the control of any person. It also identifies contracts of insurance other than life insurance as contracts of indemnity. The reason for not recognising life insurance as indemnity is simple. It is because the conditions are different in both of them. For example, a life insurance contra...
India
As stated above, indemnity in India has been defined under Section 124 of the Indian Contract Act, 1872. According to the Section, it is a contract in which a party makes a promise to save others from any kind of loss due to the actions of the promisor himself or any third person. This definition is only limited to the losses caused by the actions of humans or agencies and does not include losses that are caused due to events that cannot be controlled or foreseen by any person, as stated in t...
In India, a contract of indemnity started for the situation Osman Jamal and Sons Ltd v/s Gopal Purshotam in which the offended party is a partnership that goes about as a commission specialist for the respondent. The litigant firm was occupied with purchasing and selling Hessian and Gummies, and the offending party firm had consented to repay the r...
For the contract of indemnity to take place, the essentials must be that there must be two parties and an arrangement between them in which the promisor agrees to protect the promisee against any loss. This is the most important aspect of the indemnity contract. The loss may have occurred as a result of the promisor’s or some other third party’s be...
There is no stable position on the issue of the commencement of liability under the contract of indemnity. In England, indemnity liability arises only when the indemnity holder suffers a loss. On the contrary, the Indian Contract Act is silent on this matter. This is further discussed below. The position of the law with respect to the liability of ...
Broad indemnification
The indemnifier makes a promise to cover all parties’ damages, including those of the third party, under the broad indemnification. Even though the third party is completely at fault, he promises to cover the losses. The term “caused in whole or in part” is one of the primary signs of an indemnity contract in the broad form of indemnification.
Intermediate indemnification
Under the intermediate indemnification, the indemnifier agrees to cover only damages caused by the promisor’s and promisee’s actions. Unlike broad indemnification, it does not include the losses sustained as a result of the actions of a third party. Except in cases where that party is completely at fault, the intermediate form indemnifies a party for its own negligence. The term “caused in part” is one of the primary signs of an indemnity contract in the intermediate form of indemnification.
Limited indemnification
The indemnifier promises to cover only losses brought on by his action under the limit of indemnification. Losses incurred as a result of the promisee and third party’s actions are not covered by the contract of indemnity. The term “only to the extent” is one of the primary signs of an indemnity contract in the limited form of indemnification.
Jul 6, 2006 · The contract of indemnity, ...to the provisions of the Act. The principle behind the contract of indemnity is that where the owner of a motor vehicle is compelled to pay compensation to persons who suffered injury or damage on...account of an accident involving the vehicle, the insurer
Oct 25, 2023 · The contract of indemnity and the contract guarantee are the special contracts under the Indian Contract Act, 1872. The contract of indemnity is the contract where one person compensates for the loss of the other.
Jun 23, 2024 · This section outlines the parameters within which indemnity contracts operate in India, including the scope, validity, and interpretation of such agreements. Various legal precedents and cases further elucidate the application and nuances of indemnity under Indian contract law.
People also ask
What are the essentials of contract of indemnity?
What is Indemnity under Indian Contract Act?
What is a valid indemnity contract?
Why is contract of indemnity a narrow concept under Indian law?
Feb 3, 2021 · Indian law only covers expressed contracts of indemnity. The essentials of contract of indemnity are as follows: 1) There are two parties, indemnity holder and indemnifier. Indemnifier is that person who promises to pay compensation whereas indemnity holder is that person whose loss is to be compensated.
