Indemnity in English law means a promise to save a person harmless from the consequences of an act.

Section 124 of Indian Contract Act 1872, defines contract of indemnity as – A contract by which one person promises to save another person from the loss caused to him  by –

• The conduct of promisor,
• The conduct of the third part.

In simple words,  Indemnity means to compensate another person for the loss he suffered.

For example – A sold a house to B. afterward, it was found that the owner of the house was C and not A. Thus, C recovered the amount from A as he sold the house without owner’s permission. A can recover the compensation from B.

PARTIES OF THE CONTRACT –

There are two parties in the contract of indemnity. They are –

• Indemnifier – The person who gives indemnity i.e. who promises to protect another is known as indemnity.
• Indemnity Holder – The person who is indemnified or protected  by the Indemnifier is known as Indemnity Holder. They are also known as Indemnified.

ESSENTIALS OF INDEMNITY OF CONTRACT –

• Their must be some loss to Indemnity Holder
• Their should be two parties, indemnity holder and indemnifier.
• Contract may be expressed or implied.
• It is a contingent contract by nature.
• The liability of the indemnifier arises when the loss caused to indemnity holder is according to the terms of the contract.
• Every contract of insurance is covered in this.
• Life insurance is not covered under contract of indemnity.

RIGHTS OF INDEMNITY HOLDER

Section 125 of Indian Contract Act 1872, describes the right of an indemnity holder. These rights are as follows –

1. The indemnity holder is entitled to recover all the damages for which he may be compelled to pay in any suit in respect of any matter which the indemnifier  promises to pay.
2. Indemnity holder is entitled to recover all the costs which he may be compelled  to pay in such suit if, in bringing or defending it. If he does not go against the order of the indemnifier and if he has acted in absence of any contract as would have been prudent for him to do.
3. Indemnity holder is entitled to recover all sums which he may have paid under the terms of any compromise of any such suit and compromises was not against the  order of the indemnifier  and the compromise was such that it was to be  done ( prudent ) in absence of any contract of indemnity.

RIGHTS OF INDEMNIFIER

The Indian  Contract Act 1872, has excluded the rights of an indemnifier.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

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