Indemnity Clause


Contracts Law.  An indemnity clause, also sometimes referred to as “hold-harmless clause” or “save-harmless clause,” is a contractual provision by which one party to the contract agrees to hold another party harmless from losses resulting from certain specified circumstances.

“Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person.”  – California Civil Code § 2772.

“Anindemnity clause’ is a contractual provision in which one party agrees to answer for any specified or unspecified liability or harm that the other party might incur.”  Caballero v. Stafford, 202 S.W.3d 683, 694 (Mo. App. 2006).

“An indemnity clause is a “contractual provision in which one party agrees to answer for any specified or unspecified liability or harm that the other party might incur.” Black’s Law Dictionary 919 (11th ed. 2019). “The rules governing the requisites, validity and construction of contracts are applicable to indemnity agreements.” — Old Republic Surety Co. v. Weinerman and Associates, No. A21-0401 (Minn. App. Nov. 22, 2021).

“The terms ‘indemnify’ and ‘indemnity’ have been defined in several ways. Indemnity may be defined as the obligation resting on one party to make good a loss or damage another party has incurred.  Civil Code section 2772 defines ‘indemnity’ as ‘a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person.’  The indemnitor is the party obligated to pay another, and the indemnitee is the party entitled to receive the payment from the indemnitor. Indemnity generally refers to third party claims.  Contracts of indemnity are distinguishable from those of guaranty and suretyship in that in indemnity contracts the engagement is to make good and save another from loss upon some obligation which he has incurred or is about to incur to a third person, and is not, as in guaranty and suretyship, a promise to one to whom another is answerable.  A clause which contains the words `indemnify’ and `hold harmless’ is an indemnity clause which generally obligates the indemnitor to reimburse the indemnitee for any damages the indemnitee becomes obligated to pay third persons.  Indemnification agreements ordinarily relate to third party claims.  Although indemnity generally relates to third party claims, this general rule does not apply if the parties to a contract use the term `indemnity’ to include direct liability as well as third party liability.  Each indemnity agreement is interpreted according to the language and contents of the contract as well as the intention of the parties as indicated by the contract.  When indemnity is expressly provided by contract, the extent of the duty to indemnify must be determined from the contract itself.  The question whether an indemnity agreement covers a given case turns primarily on contractual interpretation, and it is the intent of the parties as expressed in the agreement that should control. When the parties knowingly bargain for the protection at issue, the protection should be afforded. This requires an inquiry into the circumstances of the damage or injury and the language of the contract; of necessity, each case will turn on its own facts.  The indemnity provisions of a contract are to be construed under the same rules for interpreting contracts, with a view to determining the actual intent of the parties.”  — Zalkind v. Ceradyne, Inc., 194 Cal. App. 4th 1010, 1023-25 (2011).

“An indemnity agreement may provide for indemnification against an indemnitee’s own negligence, but such an agreement must be clear and explicit and is strictly construed against the indemnitee. If an indemnity clause does not specifically address the issue of an indemnitee’s negligence, it is referred to as a ‘general’ indemnity clause. While courts may construe such general indemnity clauses to provide indemnity for losses resulting from an indemnitee’s ‘passive’ negligence, as a general rule courts in the past have refused to allow indemnification for ‘active’ negligence.  Although it has been the general rule that a party will not be indemnified for his or her own active negligence under a general indemnity agreement, our Supreme Court, while acknowledging this general rule, has held that ‘whether an indemnity agreement covers a given case turns primarily on contractual interpretation, and it is the intent of the parties as expressed in the agreement that should control. When the parties knowingly bargain for the protection at issue, the protection should be afforded. This requires an inquiry into the circumstances of the damage or injury and the language of the contract; of necessity, each case will turn on its own facts.'”  — Rooz v. Kimmel, 55 Cal. App. 4th 573, 583 (1997)

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