Indemnity
Indemnity clause
An indemnity is a contractual promise by one party to cover specified losses or liabilities incurred by the other party, often without requiring the protected party to prove fault in the ordinary way.
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Simply put
What it means in ordinary work
It is a promise to pick up certain costs if a defined event happens. The scope can vary greatly, so the wording and the governing law matter.
Why it matters
Indemnities can shift significant risk. Buyers and suppliers need to understand what is covered, what triggers the obligation and how it interacts with liability caps and insurance.
A hypothetical in practice
A hypothetical software contract includes an intellectual-property indemnity that requires the supplier to defend a claim that its product infringes a third party's rights, subject to agreed exclusions and procedures.
Common pitfalls
An indemnity is not automatically unlimited or enforceable. Do not describe its effect without checking the contract and governing law.
Overlapping indemnities and liability caps can create ambiguity. Define priority and interaction explicitly.
Scope and limits
General commercial explanation only. Indemnity wording is jurisdiction and contract specific and requires qualified legal review.
Regional lens
How this lands where you work
The global explanation is canonical. Regional notes are additive, separately sourced and shown with their own review state. They never replace the global meaning.
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As-of date for date-sensitive regional content: 5 November 2026. Read the review policy.