Indemnity Contract
In the contract of Indemnity,
a person agrees to rescue another person who is a party of some other contract
and come across any loss out of the same. The loss can be incurred from the act
of any party or by any means in that contract. In the indemnity contract, the
person who comes to the rescue of the other person to make good the loss is
known as Indemnifier. The other one whose loss is made good is known as
Indemnified or also called as Indemnity-Holder.
Example: A and B are in the contract of Indemnity. B is in a contract
with C regarding a sum of Rs 10000/-. According to the contract of indemnity
between A and B, A agrees to rescue B from any consequence that occurs from the
contract of B’s of Rs 10000/- with C.
Types
of Indemnity
The indemnities are of
two types;
1.
The Express Contract of Indemnity
2.
The Implied Contract of Indemnity
Express Contract of Indemnity: When the contract of indemnity is written or orally consented,
then such indemnity contracts are said to be Express Contract of Indemnity.
Example: A and B are into the contract of Indemnity. A agrees to
reimburse the loss incurred by B from a contract with C of some so-called
amount.
Implied Contract of
Indemnity: When
the contract of indemnity is applied by a statute or by a common law that is in
existence, then such indemnity contracts are said to be Implied Contract of
Indemnity.
Example: A and B are agent and principal. A has to supply goods to B for
his business. A supplied goods but B did not want them and denied taking the
same. A can sell the goods and if he incurs any loss while selling them, then B
has to make good the loss of A and the statue or the common law will ensure the
same.
In Indian Law, the express
contract of indemnity is only covered and the implied contract of indemnity is
also covered by the decision of the court. The law in India says that the loss
that incur shall be due to the conduct of the person. The claim is actionable
in India. The contract of indemnity do not applies to the contract of
Insurance.
In English law, both the
express and the implied contracts of indemnities are covered. The loss that was
incurred can be in any way. The law also states that the indemnity can be
assigned. The insurance contract is an indemnity contract in English Law.
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