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Law Dictionary Home Dictionary Definition indemnity

Indemnity, a contract, express or implied, to keep a person harmless from loss which that person may incur by reason of some act, omission or event. It differs from a guarantee which requires a writing under s. 4 of the Statute of Frauds in that the latter guarantee contemplates the primary liability of a third person. as pointed out by Anson on Contracts, a form of indemnity may be illustrated by 'If you will supply goods to A. I will see you paid.' A guarantee, if 'A. does not pay you, I will.' There is, as a rule, a right of subrogation to all the remedies available to the person indemnified under an indemnity available to a person indemnifying-a guarantor has the right of subrogation as well as a right of recourse against the person guaranteed unless otherwise agreed. A great number of indem-nities are implied at Common Law or statute, and the contract extends to all the loss suffered and is not limited in amount as a contract to pay a sum of money is limited. As to implied indemnities and indemnities of sureties, see Chitty on Contracts; THIRD PARTY. As to indemnity between contractors in the case of accidents to workmen, see s. 6 of the (English) Workmen's Compensation Act, 1926. Marine and fire insurances are contracts of indem-nity; see Marine Insurance Act, 1906 (6 Edw. 7, c. 41); and Castellain v. Preton, (1883) 11 QBD 380. Apparently, insurances against accidents to the assured are not contracts of indemnity and do not import the doctrine of subrogation (Halsb. L.E., 'Accident Insurance'). It should be observed that in contracts of indemnity or where otherwise a right of subrogation arises, any act of the person indemnified, which diminishes or destroys the right of the indemnifier against third parties, either destroys the right to an indemnity or reduces it proportionately; thus a landlord releasing a claim against his tenant for breach of covenant to repair may have to account for the cost of the repairs upon a claim under a policy against loss by fire. For indemnities upon rectification of the Land Register, see (English) Land Registration Act, 1925, ss. 82-85. Acts of Indemnity for neglect to take oaths of office, etc. (see, e.g., 30 & 31 Vict. c. 88, s. 1), were rendered unnecessary by 31 & 32 Vict. c. 72, s. 16. Indemnity Acts have also been often passed after insurrections for the relief of those engaged in their suppression; see, e.g., Phillips v. Eyre, (1869) LR 4 QB 243, in which a Jamaica Act indemnifying the governor was held good, and see the Indemnity Act, 1920 (10 & 11 Geo. 5, c. 48); and Restoration of Order in Ireland (Indemnity) Act, 1923; and Under Secretaries of State Act, 1929 (20 Geo. 5, c. 9). A contract by which one party promises to save the other from the loss caused to him by the conduct of the promisor himself, or by the conduct of any other person is called contract of indemnity. [Con-tract Act, s. 124 (Chapter VIII)] Means (1) A duty to make good any loss, damage, or liability incurred by another. (2) The right of an injured party to claim reimbursement for its loss, damage, or liability from a person who has such a duty. (3) Reimbursement or compensation for loss, damages, or liability in tort; esp., the right of a party who is secondary liable to recover from the party who is primarily liable for reimbursement of expenditures paid to a third party for injuries resulting from a violation of a common-law duty, Black's Law Dictionary, 7th Edn., p. 772.

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