essay on contract of indemnity

What is a Contract of Indemnity? Understanding Its Elements

The contract of indemnity is a type of contract that is commonly used in the insurance industry. In such a contract, the indemnifier agrees to bear the financial burden of any loss or damage suffered by the indemnified party, due to a specified event.

In the complex world of business transactions and legal agreements, the term "contract of indemnity" holds a pivotal place. Often discussed in the context of risk management and financial security, a contract of indemnity is a powerful legal instrument that provides individuals and entities with a safety net in uncertain and potentially perilous situations. This article examines this crucial legal idea in depth, examining its elements, purposes, and significance in the modern business landscape. Whether you are a business owner, a legal enthusiast, or simply someone looking to expand your knowledge of the legal landscape, the exploration of a contract of indemnity is a journey well worth embarking upon. Join us as we unravel the intricacies of this important legal safeguard.

Definition of Contract of Indemnity

The contract of indemnity is a type of contract that is commonly used in the insurance industry. It is basically a legal agreement between two parties where one party promises to compensate the other party for any loss or damage that may arise due to a specific event. In such a contract, the indemnifier agrees to bear the financial burden of any loss or damage suffered by the indemnified party, due to a specified event.

It is a legally binding agreement that outlines the terms and conditions under which the indemnifier will provide compensation to the indemnified party. There are several key elements that are typically included in a contract of indemnity. These include a clear description of the parties involved, the specific event or risk that the contract is designed to protect against, and the terms and conditions of the agreement. In addition, the contract may also specify the amount of compensation that will be provided in the event of a loss, as well as any limitations or exclusions that may apply. It is important for the parties involved to fully understand the terms of the contract before entering it, to avoid any potential misunderstandings or disputes down the line.

Thanks for choosing BimaKavach for Free Get Quote Insurance needs. We are finalising the chosen quote with the insurer. Our relationship manager will call you to guide you along. In case, you wish to connect with us for any help, feel free to mail us at [email protected]

Elements of Contract of Indemnity

The elements of a contract of indemnity include:

1. Indemnifier and Indemnity Holder

The two main parties involved in a contract of indemnity are the indemnifier and the indemnity holder. The indemnifier is the party who agrees to compensate the indemnity holder for any losses they may suffer. The indemnity holder is the party who is protected by the contract and who may suffer a loss or damage that the indemnifier will compensate for.

2. Promise to Indemnify

The first element of a contract of indemnity is a promise to indemnify. This means that the indemnifier promises to compensate the indemnified party for any loss or damage that may arise due to a specific event.

3. Loss or Damage

The second element of a contract of indemnity is the occurrence of loss or damage. This means that the indemnified party must have suffered some form of loss or damage to trigger the indemnifier's obligation to compensate them. The contract will specify the type of loss or damage that is covered and the circumstances under which compensation will be paid. For example, an insurance policy may cover damage to a car caused by an accident, but not damage caused by normal wear and tear.

4. Promise of Compensation

The promise of compensation is a key element in a contract of indemnity. The indemnifier promises to compensate the indemnity holder for any losses they may suffer because of a specific event. This means that the indemnifier must receive something of value in exchange for their promise to indemnify the indemnified party. This promise of compensation is usually made in exchange for a premium or fee paid by the indemnity holder.

5. Legally Binding Agreement

A contract of indemnity is a legally binding agreement between the indemnifier and the indemnity holder. Both parties must agree to the terms of the contract and must be legally able to enter into the agreement. The contract must also be supported by consideration, which is usually in the form of a premium paid by the indemnity holder.

It is essential that the terms and conditions of the contract are clearly defined and agreed upon by both parties before entering into the agreement.

Types of Contract of Indemnity

There are different types of contracts of indemnity, each with its own set of elements. Some of the common types of contracts of indemnity are:

1. Specific Indemnity Contract

This type of contract of indemnity is used when the indemnifier agrees to indemnify the indemnity holder against a specific loss or damage. The amount of indemnity is limited to the actual loss suffered by the indemnity holder. For example, if the indemnity holder suffers a loss of Rs 10,00, 000 the indemnifier will only be liable to pay Rs 10,00, 000.

2. Continuing Indemnity Contract

A continuing indemnity contract is one in which the indemnifier agrees to indemnify the indemnity holder against any loss or damage that may arise in the future. This type of contract is often used in the insurance industry. For example, a car insurance policy is a continuing indemnity contract, as the insurer agrees to indemnify the insured against any loss or damage to the car that may occur during the policy period.

3. Limited Indemnity Contract

A limited indemnity contract is one in which the indemnifier agrees to indemnify the indemnity holder against a specific type of loss or damage. The amount of indemnity is also limited to a specific amount. For example, a fire insurance policy is a limited indemnity contract, as the insurer agrees to indemnify the insured against loss or damage caused by fire, up to a certain amount.

4. Reverse Indemnity Contract

A reverse indemnity contract is one in which the indemnity holder agrees to indemnify the indemnifier against any loss or damage that may arise in the future. This type of contract is often used in construction contracts, where the contractor agrees to indemnify the owner against any loss or damage that may occur during the construction period.

In conclusion, each type of contract of indemnity has its own set of elements and is used in different situations. It is important to understand the type of contract of indemnity that is being used to ensure that all parties are aware of their rights and obligations.

Importance of Contract of Indemnity

A contract of indemnity is an essential legal document that protects parties from financial loss. It is a crucial agreement that provides peace of mind to both parties involved in the transaction. Here are some of the reasons why a contract of indemnity is important:

• Protection Against Financial Loss

A contract of indemnity protects parties from financial loss that may occur due to unforeseen circumstances. It ensures that the indemnified party is compensated for any loss suffered because of the actions of the indemnifier.

2. Risk Management

A contract of indemnity helps in managing risks associated with a particular transaction. It specifies the terms and conditions of the agreement and outlines the responsibilities of each party. This helps in avoiding disputes and legal battles that may arise due to misunderstandings or misinterpretations.

3. Legal Protection

A contract of indemnity provides legal protection to both the indemnifier and the indemnified party. It specifies the rights and obligations of each party, and in case of any dispute, the court can refer to the contract to resolve the matter.

4. Peace of Mind

A contract of indemnity provides peace of mind to both parties involved in the transaction. It ensures that they are protected from financial loss and that their interests are safeguarded. This helps in building trust and strengthening the relationship between the parties.

Examples of Contract of Indemnity

Here are some examples of contracts of indemnity from the domain of business

Example 1: Insurance Policies

Insurance policies are a common form of contract of indemnity. When an individual purchases an insurance policy, they are essentially entering into a contract with the insurance company. The policyholder pays a premium to the insurance company, and in return, the insurance company agrees to compensate the policyholder for any losses or damages that may occur due to a covered event, such as an accident or a natural disaster.

Example 2: Employment Contracts

Employment contracts often contain indemnity clauses that protect the employer from any losses or damages that may occur due to the actions of the employee. For example, if an employee causes damage to company property, the employer may seek compensation from the employee through an indemnity clause in the employment contract.

Example 3: Construction Contracts

Construction contracts often contain indemnity clauses that protect the contractor from any losses or damages that may occur during the construction process. For example, if a construction worker is injured on the job, the contractor may seek compensation from the property owner through an indemnity clause in the construction contract.

As we conclude our journey into the concept of indemnity, it becomes abundantly clear that knowledge of the contract of indemnity is not just a prerogative of legal experts but an asset for all who engage in contractual relationships. In a world full of unforeseen risks and liabilities , the contract of indemnity empowers us to navigate these challenges with confidence and assurance. From safeguarding personal assets to facilitating complex mergers, its significance cannot be overstated. Do remember that a well-crafted contract of indemnity can be your steadfast ally. It's not merely a legal document; it's a promise of protection in an unpredictable world.

Read more about fire insurance

Read more about marine sales policy

You might also like

What are the different principles of insurance, subscribe to our newsletter.

Be the first to know about releases and industry news and insights.

• Registration
• Determining Fire Insurance Premiums: Explaining the factors that influence fire insurance premiums

Principle of Utmost Good Faith: Examining the duty of disclosure in insurance

Demystifying subrogation: how it works in the insurance industry.

• War Risk Insurance Explained: What It Is, Who Needs It, and How It Works
• Necessary Documentation for Marine Insurance Policies

The Significance of Indemnity in Insurance Contracts

• By admin --
• Tuesday, 23 May, 2023

Introduction:

Insurance is a risk management tool that provides financial protection against unforeseen events or losses. One of the key principles that underlies insurance contracts is the principle of indemnity. Indemnity is a fundamental concept in insurance, and understanding its significance is essential for both insurers and policyholders. This essay aims to explore the significance of indemnity in insurance contracts, highlighting its key features and implications.

Understanding Indemnity:

At its core, indemnity in insurance refers to the principle of restoring the insured party to the same financial position they were in before a loss occurred. In other words, it seeks to compensate the policyholder for the actual financial loss suffered rather than providing a profit or windfall. The principle of indemnity ensures that the insured party does not experience a financial gain from the occurrence of an insured event but is protected against financial loss.

Features of Indemnity:

Compensation for Actual Loss: Indemnity ensures that the insured party is compensated for the actual loss incurred. The insurer is obligated to pay an amount equal to the value of the loss suffered, up to the limit specified in the insurance policy. This prevents overcompensation and ensures that the insured party is not unjustly enriched by the insurance claim.

No Duplication of Coverage: Indemnity prevents the duplication of coverage for the same loss. If the insured has multiple insurance policies covering the same risk, they cannot claim more than the actual loss. The principle of indemnity encourages policyholders to insure their assets reasonably and avoids the moral hazard of profiting from multiple claims for the same loss.

Subrogation Rights: Indemnity gives the insurer the right to pursue legal action against third parties who may be responsible for the insured loss. Through subrogation, the insurer can recover the amount paid to the insured from the responsible party, thus mitigating their own loss. This provision ensures that the principle of indemnity is upheld, and the burden of compensation is appropriately allocated.

Implications of Indemnity:

Risk Transfer: Indemnity allows individuals and businesses to transfer the financial risk associated with potential losses to an insurance company. By paying premiums, policyholders shift the burden of potential losses to the insurer, which has the financial capacity to indemnify them in case of an insured event. This risk transfer mechanism provides peace of mind and financial security to policyholders.

Fair Premium Calculation: The principle of indemnity enables insurers to calculate fair premiums for insurance coverage. Since the insurer is liable only for the actual loss suffered by the insured, premiums can be determined based on the probability and magnitude of potential losses. This ensures that premiums are reasonable and reflect the risk exposure of the insured party.

Insurable Interest: Indemnity reinforces the concept of insurable interest, which states that the insured must have a financial stake or relationship with the insured property or event. Insurable interest prevents individuals from obtaining insurance for risks in which they have no legitimate interest, thus avoiding speculative or fraudulent insurance practices.

Moral Hazard Mitigation: The principle of indemnity helps mitigate moral hazard, which refers to the increased propensity for reckless behavior or indifference to potential losses when individuals are protected by insurance. By ensuring that the insured party is not financially better off after a loss, indemnity discourages fraudulent claims or intentional damage to insured assets.

Promotes Economic Stability: Indemnity plays a crucial role in promoting economic stability. By providing financial compensation for losses, insurance contracts protect individuals, businesses, and the economy from the adverse impact of unexpected events. The principle of indemnity allows policyholders to recover and rebuild after a loss, preventing financial distress and fostering economic resilience.

Conclusion:

The principle of indemnity is a cornerstone of insurance contracts, ensuring that policyholders are adequately compensated for their actual losses without experiencing a windfall. It provides a fair mechanism for transferring risk, calculating premiums, and promoting economic stability. Indemnity upholds the principles of fairness, equity, and risk management in the insurance industry. Policyholders rely on indemnity to safeguard their financial well-being, while insurers use it as a basis for providing effective and sustainable insurance coverage. Understanding the significance of indemnity is essential for all stakeholders in the insurance market to make informed decisions and maintain the integrity of insurance contracts.

Insurance-Principles Related News

Principle of Indemnity in Insurance

Application of Principle of Indemnity to Various Branches of Insurance Life

Comment (0).

Copyright 2022-23 © RS Insurance Info. All rights reserved.

ISSN 2581-5369

HeinOnline, MANUPATRA, Google Scholar Indexed

Critical Analysis of Contract of Indemnity

Divya saini.

• Show Author Details

Student at Symbiosis Law School, Pune, India

• img Download Full Paper
• img Export Citation

Export citation

This article offers a thorough examination of indemnification agreements made in accordance with the Indian Contract Act of 1872. According to the definition of indemnity, which is “Assurance against loss,” indemnification is paying a person for losses or damages brought on by their own actions or those of another party. Sections 124 and 125 of the Act, which describe the characteristics of indemnity contracts and the rights of the indemnity holder, are examined in this research. However, it draws attention to the fact that there are no provisions defending the indemnifier's rights, which leaves room for legal ambiguity and gaps. The essay discusses a number of concerns, such as ambiguities in contract provisions, problems with reciprocatory contracts, issues with privity to contracts, and difficulties brought on by changes in the market. It also examines the need for better language to specify the indemnifier's advantages and makes suggestions for changes to Section 124's definition of loss and rights. The study also examines implied indemnity contracts and the difficulties they provide, highlighting the significance of transparency and equity for both parties. It emphasizes the fact that a simple indemnity provision cannot release a negligent party from liability. Lastly, the article advocates for an amendment to the Indian Contract Act to ensure equity and justice for both parties involved in indemnity contracts, as well as to resolve ambiguities and promote a fair resolution of liability issues.

• Section 124
• Section 125
• Indian Contract Act 1872
• reciprocatory contracts

Information

International Journal of Law Management and Humanities, Volume 6, Issue 5, Page 1425 - 1433

Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution -NonCommercial 4.0 International (CC BY-NC 4.0) (https://creativecommons.org/licenses/by-nc/4.0/), which permits remixing, adapting, and building upon the work for non-commercial use, provided the original work is properly cited.

Copyright © IJLMH 2021

Total number of HTML views: 121

Total number of pdf downloaded: 85, open access.

https://doij.org/10.10000/IJLMH.115919

Recent content

1 ipr management, protection and enforcement in india need for stronger ipr regime.

By Raunaq Kalra

Volume: 7 Issue : 2 Page: 1854 - 1900

2 Free Speech in Restricted Democracy in India

By Shalini alias Simmy

Volume: 7 Issue : 2 Page: 1844 - 1853

3 Evolution of Bail Provisions in Specialized Criminal Legislation: A Study of Indian Statutes and Judicial Precedents

By Abhishek Bhardwaj

Volume: 7 Issue : 2 Page: 1828 - 1843

4 Towards a Just Climate: Navigating Complexities and Challenges in Climate Change Discourse and Action

By Subhagata Chowdhury

Volume: 7 Issue : 2 Page: 1807 - 1827

5 Reconstruction of Criminal Sanctions against Corporations in Tax Criminal Actions

By Bambang Ali Kusumo , Supriyanta and Rozi Irfan Rosyadhi

Volume: 7 Issue : 2 Page: 1784 - 1806

International Journal of Law Management & Humanities

Typically replies within 24 hours.

Any questions related to the journal or your submission?

WhatsApp Us

🟢 We will respond within 24 hours, maybe less.

WhatsApp us.

• Search Search Please fill out this field.

What Is Indemnity?

How indemnity works, special considerations, history of indemnity, the bottom line.

• Personal Finance

Indemnity: What It Means in Insurance and the Law

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

Indemnity is a comprehensive form of insurance compensation for damage or loss. When the term indemnity is used in the legal sense, it may also refer to an exemption from liability for damage.

Indemnity is a contractual agreement between two parties. In this arrangement, one party agrees to pay for potential losses or damage.

A typical example is an insurance contract , in which the insurer or the indemnitor agrees to compensate the other (the insured or the indemnitee) for any damage or losses in return for premiums paid by the insured to the insurer. With indemnity, the insurer indemnifies the policyholder—that is, promises to make whole the individual or business for any covered loss.

Key Takeaways

• Indemnity is a comprehensive form of insurance compensation for damage or loss.
• In an indemnity arrangement, one party agrees to pay for potential losses or damage caused by another party.
• A typical example is an insurance contract, in which the insurer or the indemnitor agrees to compensate the other (the insured or the indemnitee) for any damage or losses in return for premiums paid by the insured to the insurer.

Investopedia / Laura Porter

An indemnity clause is standard in the majority of insurance agreements. However, exactly what is covered, and to what extent, depends on the specific agreement.

Any indemnity agreement has what is called a period of indemnity , or a specific length of time for which the payment is valid. Similarly, many contracts include a letter of indemnity , which guarantees that both parties will meet the contract stipulations (or else an indemnity must be paid).

Indemnity is common in agreements between an individual and a business (for example, an agreement to obtain car insurance ). However, it can also apply on a larger scale to relationships between businesses and government or between governments of two or more countries.

Indemnity clauses can be complicated to negotiate and can lead to increased costs of services because of the increased risk of the contract.

Sometimes, governments, a business, or an entire industry must take on the costs of larger issues on behalf of the public, such as outbreaks of disease. For example, according to Reuters, Congress authorized $1 billion to fight a bird flu epidemic that devastated the U.S. poultry industry in 2014 and 2015. The U.S. Department of Agriculture spent $200 million of that money on indemnity payments paid to farmers who needed to kill their birds to stop the spread of the virus.

How Indemnity Is Paid

Indemnity may be paid in the form of cash, or by way of repairs or replacement, depending on the terms of the indemnity agreement. For example, in the case of home insurance , the homeowner pays insurance premiums to the insurance company in exchange for the assurance that the homeowner will be indemnified if the house sustains damage from fire, natural disasters, or other perils specified in the insurance agreement.

In the event that the home is damaged significantly, the insurance company will be obligated to restore the property to its original state—either through repairs by authorized contractors  or reimbursement to the homeowner for spending on such repairs.

Indemnity Insurance

Indemnity insurance  is a way for a company (or individual) to obtain protection from indemnity claims. This insurance protects the holder from having to pay the full sum of an indemnity, even if the holder is responsible for the cause of the indemnity.

Many companies make indemnity insurance a requirement, as lawsuits are common. Everyday examples include malpractice insurance , which is common coverage for those in the medical field, and errors and omissions insurance (E&O), which protects companies and their employees against claims made by clients and applies to any given industry. Some companies also invest in deferred compensation indemnity insurance, which protects the money that companies expect to receive in the future.

As with any other form of insurance, indemnity insurance covers the costs of an indemnity claim, including, but not limited to, court costs, fees, and settlements. The amount covered by insurance depends on the specific agreement, and the cost of the insurance depends on many factors, including the policyholder's history of indemnity claims.

Property leases also include indemnity clauses. For example, in the case of a rental property , a tenant is typically responsible for damage due to negligence, fines, lawyer fees, and more depending on the agreement. 

Acts of Indemnity

An act of indemnity protects those who have acted illegally from being subject to penalties. This exemption typically applies to public officers, such as police officers or government officials, who are sometimes compelled to commit illegal acts in order to carry out the responsibilities of their jobs.

Often, such protection is granted to a group of people who committed an illegal act for the common good, such as the assassination of a known dictator or terrorist leader.

Although indemnity agreements haven't always had a formal name, they are not a new concept. Historically, indemnity agreements have served to ensure cooperation between individuals, businesses, and governments.

In 1825, Haiti was forced to pay France what was then called an "independence debt." The payments were intended to cover the losses that French plantation owners "suffered" after losing land and slaves. While this form of indemnity was incredibly unjust, it is one example of many historical cases that show the ways indemnity has been applied worldwide.

Another common form of indemnity is the reparations a winning country seeks from a losing country after a war. Depending on the amount and extent of the indemnity due, it can take years and even decades to pay off. One of the most well-known examples is the indemnity Germany paid after its role in World War I. Those reparations were finally paid off in 2010, almost a century after they were assessed.

What Is Indemnity in Insurance?

Indemnity is a comprehensive form of insurance compensation for damage or loss. It amounts to a contractual agreement between two parties in which one party agrees to pay for potential losses or damage caused by another party.

What Is the Purpose of Indemnity?

Indemnification, or indemnity, designates one party (the indemnifying party) as being required to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party damage claims.

What Is the Rule of Indemnity in Insurance?

With indemnity insurance, one party commits to compensate another for prospective loss or damage. In insurance policies, in exchange for premiums paid by the insured to the insurer, the insurer offers to compensate the insured for any potential damage or losses.

Indemnity is a type of insurance compensation paid for damage or loss. When the term is used in the legal sense, it also may refer to an exemption from liability for damage. Indemnity is a contractual agreement between two parties in which one party agrees to pay for potential losses or damage caused by another party. Typically, an insurance contract dictates that the insurer, also known as the indemnitor, agrees to compensate the other party involved (the insured or the indemnitee) for any damage or losses in return for premiums paid by the insured.

University of Wisconsin System. " Hold Harmless and Indemnity Agreements ."

Congressional Research Service. " Update on the Highly-Pathogenic Avian Influenza Outbreak of 2014-2015 ."

Reuters. " USDA Has $80 million-$90 Million To Fight Bird Flu ."

New York University Journal of International Law and Politics. " France's Overdue Debt to Haiti ," Page 1.

The Christian Science Monitor. " Germany Finishes Paying WWI Reparations, Ending Century of 'Guilt' ."

U.S. Holocaust Memorial Museum. " Timeline of Events: Treaty of Versailles Presented to German Delegation ."

Thomson Reuters. " Indemnification Clauses in Commercial Contracts ."

Cornell Law School - Legal Information Institute. " Indemnity ."

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Contract of Indemnity

• Contract Act Subject-wise Law Notes
• January 26, 2021

Contract of Indemnity is a contract, express or implied to keep a person, who has entered into or who is about to enter into, a contract or incur any other liability, indemnified against loss, independent of the question whether a third person makes a default.

Indemnity is protection against possible damages. Deriving from a Latin word, indemnis , which stands for ‘unhurt’ or ‘free from loss’. In its broadest sense, it means to compensate for any loss that a person has incurred. The liability or the duty to pay arises out of different reasons such as an agreement or from obligations arising out of the relations between the concerned parties or by statute.

In English Law, indemnity is the promise to save a person from the consequences of an act, the promise may be expressed or implied. Indemnity is not limited to cases of contract . A right of indemnity may arise between a principal and agent , an employer and employee and so on.

Definition of Contract of Indemnity

According to Halsbury, Indemnity is a contract, express or implied to keep a person, who has entered into or who is about to enter into, a contract or incur any other liability, indemnified against loss, independent of the question whether a third person makes a default.

Black’s Law Dictionary defines Indemnity in various instances;

“A contractual or equitable right under which the entire loss is shifted from a tortfeasor who is only technically or possibly at fault to another who is primarily or actively responsible.” As was described in Moorhead v. Waelde [1] .

To understand the concept of Contract of Indemnity, the facts of Adamson v Jarvis [2] serve as a perfect illustration,

The defendant instructed the plaintiff, who was an auctioneer, to sell certain cattle. After a while, it came upon the knowledge of the plaintiff that the defendant did not own the livestock in the first place. The owner of the livestock sued the plaintiff as he was the auctioneer and the plaintiff sued the defendant for indemnity for the loss, he had suffered due to the defendant’s actions.

The court was of the opinion that the plaintiff having acted on the request of the defendant, was entitled to assume that, if what he did, learned to be wrongful, he would be indemnified by the defendant.

The indemnity does not need to be expressed. In the case of Secretary of State v Bank of India Ltd [3] ,

Ms. Gangabai held a government promissory note for Rs. 5000. Her broker Acharya forged her endorsement to his favour and endorsed it to the respondents who applied to the Public Debt Officer to have it renewed. Gangabai, when aware of this forgery, sued the appellant and recovered damages. The appellant then brought action against the respondents to be indemnified against the loss. The State was allowed to recover from the bank on an implied promise of indemnity.

Under circumstances not too different from this, in Starkey v. Bank of England [4] , a bank was allowed to recover indemnity from an agent who presented a transfer document on which one out three signatures were forged, even though he was unaware of this fact.

The Indian Contracts Act 1872 lays down the definition of contract of indemnity, the extent of the liability of indemnifier and various other provisions in relation to the same. It is a both amending and a consolidating act. Indemnity is essentially a contract of protection which need not always be expressed.

Section 124 of the Indian Contract Act defines Contract of Indemnity as ‘A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a contract of indemnity.

The person who gives the indemnity is called the indemnifier and the person for whose protection it is given is called the indemnity-holder or the indemnified .

Nature of Contract of Indemnity

Contracts of insurance, indemnity and guarantee are contingent in nature. A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen.

Contracts of guarantee and contracts of indemnity perform similar commercial functions in providing compensation to the creditor for the failure of a third party to perform his obligation. A contract of indemnity is an agreement to be liable for the acts of another and one of its essential features is that it exists only between two parties and no other party is relevant to the subject matter of the contract. This is the primary difference between a contract of indemnity and contract of guarantee.

Under indemnity, the indemnifier undertakes an independent obligation to discharge the liability in any event and makes himself primarily liable voluntarily.

All contacts of insurance are contracts of indemnity except life insurance but it is not the same vice versa. Life insurance requires payment of premium during one’s lifetime and in return the person shall receive the reimbursement at the time of death or maturity. Since the existence of a quantified loss is absent, which is an essential for a contract of indemnity, life insurance does not categorize under indemnity contracts.

New India Assurance Co. Ltd v. State Trading Corporation of India [5] states as follows,

“Almost all insurance other than life and personal accident insurance are contracts of indemnity. The insurer’s promise to indemnify is an absolute one.”

The obligation of the liability may arise out of legal or equitable duty to indemnify in a particular set of circumstances. Indemnity can also be a useful remedy in cases of innocent misrepresentation. A third party cannot sue the indemnifier based on the principle of privity of contract as was held in National Petroleum Company v. Popat Lal Mulji [6] in the High Court of Bombay.

A number of changes have been made within the concept of indemnity in contracts, in spite of which it still has a rather restricted scope and does not serve its purpose as well as it should. The Law Commission of India has submitted in its reports in the past, their concerns about the enforcement of this Act. Their recommendations for improvement have now been successfully added in the Act. The definition provided under the Indian Contract Act is not inclusive of many circumstances and leaves room for interpretation, which may lead to ambiguity and confusion.

Extent of liability in Contract of Indemnity

Section 125 lays down the extent of liability or the rights available to the indemnity-holder. The promisor shall be liable in any event whether or not the promisee makes default.

The promisee is entitled to recover damages that he was compelled to pay in a suit for which he was being indemnified-

• All damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies
• All costs which he may be compelled to pay in any suit if, in bringing or defending it, he did not contravene the orders of the promisor and acted as it would have been prudent for him to act in the absence of any contact of indemnity, or if the promisor authorized him to bring or defend the suit.

A prime example would be the case of Adamson v. Jarvis [7] where the court held that since the plaintiff acted according to the defendant’s instructions and incurred a loss because of the same, the plaintiff was entitled to compensation.

• All sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor and was one which it would have been prudent for the promisee to make in the absence of any contract of indemnity, or if the promisor authorized him to compromise the suit.

A truck, under indemnity insurance for Rs. 2,00,000, was stolen with no chances of recovery. It was held that the amount of indemnity fixed by the surveyor was at Rs. 1,87,492. Furthermore, it was also held that this was payable with 18% interest due to the delay period. The settlement of claim at a lesser amount by insurance authorities was arbitrary and unfair under the Article 14 of the Constitution.(Equality before law.)

Re British India General Insurance Co. Ltd [8] tells us that any person who claims under an indemnity must prove that they have suffered a loss.

Although in Khetarpal Amarnath v. Madhukar Pictures [9] it was held that the right of the indemnity holder need not be confined to the contents of section 125. His rights are not limited by the provisions of this Act. The indemnity-holder is open to use for the specific performance of the contract of indemnity if an absolute liability is incurred by him. Therefore, there is no particular straitjacket approach for the determination of the extent of liability as it depends on the nature and terms of the contract which is subjective to each case.

Indemnity cannot be implied in favour of a person who has executed a bail bond for the appearance of an accused in court as it would be considered unlawful, this was explained in Mehrauli v. Sariatulla [10] . Indemnity bond shall be valid in case a lessee agrees to pay rent to one of the two people in consideration. [11]

In Geismar v. Sun Alliance and London Insurance Ltd [12] , it was held that an assured cannot claim indemnity against consequences of an intentional wrongful act. Geismar had brought into the U.K. jewellry which he failed to declare to the customs and on which he did not pay customs duty. Later, Geismar claimed indemnity from the defendant insurers for the loss through theft at his home of the uncustomed jewellery. The judges held that Geismar could not enforce the contract of indemnity. The shipowners who were promised indemnity were unable to enforce the promise.

Commencement of liability of the indemnifier

After providing the promise of indemnifying losses, when does the indemnifier become liable to pay? And under what circumstances can the indemnity holder be entitled to recover the promised indemnity.

According to the original English Rule the maxim of law was “you must be damnified before you claim to be indemnified”, which means that only if you have suffered an injury, you can claim indemnity. However the law has transformed over the years. In present times, the indemnifier shall not wait for the indemnity holder to claim the reimbursement, he shall make it as soon as the liability occurs.

In Liverpool Mortgage Insurance Co [13] case, where the judges opined that, the plaintiff was entitled

“Indemnity does not merely mean to reimburse in respect of money paid but to save from loss in respect of the liability against which indemnity has been given because otherwise indemnity may be worth very little if the indemnity holder is not able to pay in the first instance.”

Before the evolution of this rule, the indemnified could take no action under the English common law until an actual loss had been incurred. In such a case if a suit were to be filed against him he would have to wait till the judgment for him to sue on his indemnity. This puts the burden upon the indemnified. He could not avail himself of his indemnity till he had satisfied the judgment. Hence, the courts of equity held that if the liability incurred was absolute, the indemnifier had to pay off the claim or pay sufficient money into court, to pay off when the claim was made. The whole process was explained by J. Chagla in Gajanan Moreshwar v. Moreshwar Madan . [14] it was held that the Indian Contract Act is not an exhaustive code to provide each and every condition to be fulfilled in the contract.

Logic along the same lines was explained in The New India Assurance Company Ltd. v The State Trading Corporation of India Ltd and Another [15] , and the aforementioned view was upheld, where the bench opined that irrespective of whether a loss has been incurred, the defendant is liable in case of breach of contract .

In cases where there is a requirement to fulfil a condition, the liability shall not arise until the condition is fulfilled. For instance, a contract for indemnity in a hire purchase agreement arising from a contract becoming enforceable does not become operative is an implied condition of providing a log book is not fulfilled. The loss in such a case arises because of the plaintiff allowing dealers to hand over the car without the logbook.

Osman Jamal and Sons Ltd. v. Gopal Purushottam [16] was one of the first cases to provide indemnity before payment. The plaintiff company was a commission agent for the defendant’s company and in return they promised to indemnify any losses incurred by the plaintiff with respect to these particular transactions. Upon one such incident where the plaintiff incurred losses, they filed for recovery of indemnity from the defendant since their firm went into liquidation. To this the defendant argued that the plaintiff was entitled to maintain the suit only if they paid the amount of liability. The court held that,

“Indemnity is not necessarily given by repayment after payment. Indemnity requires that the party to be indemnified shall never be called for payment.”

Thus, the liability commences the minute loss in the form of liability becomes absolute.

The liability of indemnifier arises when indemnified suffers a loss, as was held, in Chand Bibi v. Santosh Kumar Pal [17] . At the purchase of a property, the defendant’s father agreed to pay off plaintiff’s mortgage debt and indemnify if they were made liable for the same. He later failed to do so, following which the plaintiff filed a suit to enforce the promise of indemnity but the court held that the suit was premature in relation to contract of indemnity as plaintiff had not suffered a loss yet.

Despite the many provisions in the Indian Contract Act. 1872, it still equivocal when it comes to rights of the indemnifier. Nevertheless, the absence of such a provision does not take away from the promisor. Those rights are based on natural equity and general application and are a crucial part of the law of indemnity. From Jaswant Singh v. Section of State [18] , it can be understood that the indemnifier is to the indemnified the same way a creditor is to the debtor, i.e, the indemnified is entitled to the securities of the indemnity-holder just as the creditor is against his principal debtor. It was held that the rights of the indemnifier are similar to rights of surety, surety is entitlement to the perks of all securities that the creditor has. [19]

It would be fair to conclude that the application of the term indemnity is broad and narrow at the same time. The english definition of indemnity is wide enough to include a promise of indemnity against loss arising from any cause whatsoever but the definition according to the Indian Contract Act is narrower in comparison. The Indian Law on contractual indemnities has in some respects diverged from the English law and followed its own path. Such differences are, however, greatly outweighed by their similarities. [20]

For more articles on Law of Contracts, Click Here.

For law notes, Click Here.

[1] La. App. 499 So, 2D 387 389

[2] (1827) Bing 66:5 LJ OS 68

[3] AIR (1938) PC 191

[4] (1903) AC 114

[5] AIR 2007 Guj. 517

[6] (1936) 38 BOMLR 610, 165 Ind Cas 338

[8] AIR 1971 Bom 102

[9] AIR 1956 Bom 106

[10] AIR 1930 Cal 596

[11] Radha Govinda Rai v. Khas Dharmabank Colliery Co. Ltd. AIR 1963 Pat 160

[12] (1978) QB 383

[13] (1914) 2 Ch 617 at p. 638

[14] AIR 1942 Bom 302 at p. 304

[15] AIR 1969 Guj. 18

[16] AIR 1929 Cal. 208

[17] AIR 1993 Cal 641

[18] 14 BOM 299

[19] http://www.ejusticeindia.com/contract-of-indemnity-nature-and-the-scope/

[20] Indemnities and the Indian Contract Act 1872, Wayne Courtney, 27 NLSI Rev. 2015

Author Details: Rashmi Rawat (Student, PES’s Adv. Balasaheb Apte College of Law, Dadar)

You might like

Bellamy vs Sabine

Bail and Anticipatory Bail in India

Bacha F Guzdar vs Commissioner of Income Tax (1954)

Leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

Name  *

Email  *

Add Comment  *

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Post Comment

• Skip to main content
• Skip to primary sidebar

Business Jargons

A Business Encyclopedia

Contract of Indemnity

Definition : In common parlance, the word ‘indemnity’ implies reimbursement against financial loss or protect someone from incurring a loss.

In law, Contract of indemnity can be defined as a legal contract between two persons whereby one party commits to indemnify, i.e. to compensate or reimburse, the loss incurred to the other party, by the conduct of the party, who is making the promise or by the conduct of the third party.

Therefore, it does not cover the loss caused by – Conduct of promisee, Accident and An act of God, i.e. any kind of natural calamity such as earthquake, floods etc. Nevertheless, the contracts of insurance , i.e. Fire and Marine Insurance will be covered under the contract of indemnity, but life insurance is not covered in it.

The contract of indemnity is a form of contingent contract , as the liability of the indemnifier, is based on an event whose occurrence is contingent. Further, the liability of the indemnifier is primary and independent.

It is characterised by all the essential elements of a valid contract, i.e. lawful object, consideration, free consent of the parties, capacity of the parties to contract, etc.

Parties to Contract of Indemnity

• Indemnifier : The promisor, who promises to make good the loss caused to the other party, is called as Indemnifier.
• Indemnified : The person who is assured to be compensated for the loss caused (if any) is called as indemnified or indemnity holder.

The mode of the contract of indemnity can be express or implied, i.e. if a person explicitly promises to save the other from losses, the mode of the contract will be express, whereas if the contract is signified from the conditions of the case, then the mode of the contract will be implied.

The examples of the contract of indemnity are given hereunder:

• Suppose John sold a house to Paul on the instruction of Peter. Afterwards, it is disclosed that Alex is the registered owner of the house. Alex recovered the amount from John for selling his house. Now, John can recover the compensation from Peter. This is an implied form of a contract of indemnity.
• Beta Insurance Company entered into a contract with Alpha Ltd., to compensate for loss caused by accidental fire to the company’s stock of goods up to Rs. 50,00,000 for a premium of Rs. 1,00,000. This is an express form of a contract of indemnity.

Rights of Indemnity Holder

The indemnity holder who is acting within the periphery of his authority can compensate for the loss caused to him/her from the indemnifier. So, the upcoming points will discuss the rights of the indemnity holder on being sued:

• Any kind of damages which the indemnity holder is bound to pay in any suit concerned with any issue to which the contract of indemnity applies.
• Any expenses which the indemnity holder is bound to pay, so as to bring or defend the suit.
• All the amount which the indemnity holder has paid, in connection to the settlement of the suit.

Rights of Indemnifier

• Once the indemnity holder is compensated for the loss caused, the indemnifier possesses all the rights to all the methods and resources that can save the indemnifier from loss.

The essence of the contract of indemnity is the loss to the party , i.e. Indemnification can be done only if the loss is incurred to the other party, or if it is sure that the loss will incur.

Related terms:

• Void Contract
• Voidable Contract

Reader Interactions

AKhil Chandel says

April 6, 2021 at 10:20 am

It is an ultimate explanation

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Contract of Indemnity

What is Contract Of Indemnity?

Contract of indemnity is a special kind of contract. The term ‘indemnity’ literally means “security or protection against a loss” or compensation. According to Section 124 of the Indian Contract Act, 1872   “A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a contract of indemnity.”  

Try our all-in-one Legal Practice Management Software Free Sign Up Now!

Example: P made a contract of indemnity to indemnify Q against the consequences of any proceedings which R may take against Q in respect of a certain sum of money.

OBJECTIVE OF CONTRACT OF INDEMNITY

The objective of entering into a contract of indemnity is to protect the promisee against unanticipated losses.

PARTIES TO THE CONTRACT OF INDEMNITY

A contract of indemnity has two parties.

• The promisor or indemnifier
• The promisee or the indemnified or indemnity-holder

The promisor or indemnifier: He is the person who promises to bear the loss.

The promisee or indemnity-holder: He is the person whose loss is covered or who are compensated.

In the above-stated example,

• P is the indemnifier or promisor as he promises to bear the loss of Q.
• Q is the promisee or the indemnified or indemnity-holder as his loss is covered by P.

Read Also: What are the Remedies for Breach of Contract

ESSENTIALS OF CONTRACT OF INDEMNITY

• PARTIES TO A CONTRACT: There must be two parties, namely, promisor or indemnifier and the promisee or indemnified or indemnity-holder.
• PROTECTION OF LOSS: A contract of indemnity is entered into for the purpose of protecting the promisee from the loss. The loss may be caused due to the conduct of the promisor or any other person.
• EXPRESS OR IMPLIED: The contract of indemnity may be express (i.e. made by words spoken or written) or implied (i.e. inferred from the conduct of the parties or circumstances of the particular case).
• ESSENTIALS OF A VALID CONTRACT: A contract of indemnity is a special kind of contract. The principles of the general law of contract contained in Section 1 to 75 of the Indian Contract Act, 1872 are applicable to them. Therefore, it must possess all the essentials of a valid contract.
• NUMBER OF CONTRACTS: In a contract of Indemnity, there is only one contract that is between the Indemnifier and the Indemnified.
• RIGHTS OF PROMISEE/ THE INDEMNIFIED/ INDEMNITY HOLDER

As per Section 125 of the Indian Contract Act, 1872 the following rights are available to the promisee/ the indemnified/ indemnity-holder against the promisor/ indemnifier, provided he has acted within the scope of his authority.

• RIGHT TO RECOVER DAMAGES PAID IN A SUIT [SECTION 125(1)]: An indemnity-holder has the right to recover from the indemnifier all damages which he may be compelled to pay in any suit in respect of any matter to which the contract of indemnity applies.
• RIGHT TO RECOVER COSTS INCURRED IN DEFENDING A SUIT [SECTION 125(2)]: An indemnity-holder has the right to recover from the indemnifier all costs which he may be compelled to pay in any such suit if, in bringing or defending it, he did not contravene the orders of the promisor, and acted as it would have been prudent for him to act in the absence of any contract of indemnity, or if the promisor authorized him to bring or defend the suit.
• RIGHT TO RECOVER SUMS PAID UNDER COMPROMISE [SECTION 125(3)]: An indemnity-holder also has the right to recover from the indemnifier all sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor, and was one which it would have been prudent for the promisee to make in the absence of any contract of indemnity, or if the promisor authorized him to compromise the suit.

Read Also: Frustration of Contract

COMMENCEMENT OF LIABILITY OF PROMISOR/ INDEMNIFIER

Indian Contract Act, 1872 does not provide the time of the commencement of the indemnifier’s liability under the contract of indemnity. But different High Courts in India have held the following rules in this regard:

• Indemnifier is not liable until the indemnified has suffered the loss.
• Indemnified can compel the indemnifier to make good his loss although he has not discharged his liability.

In the leading case of Gajanan Moreshwar vs. Moreshwar Madan(1942), an observation was made by the judge that “ If the indemnified has incurred a liability and the liability is absolute, he is entitled to call upon the indemnifier to save him from the liability and pay it off”.

Thus, Contract of Indemnity is a special contract in which one party to a contract (i.e. the indemnifier) promises to save the other (i.e. the indemnified) from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person. Section 124 and 125 of the Indian Contract Act, 1872 are applicable to these types of contracts.

Try our Debt Resolution solutions today       Request a Demo

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

• Call for Papers
• Essay Writing
• Lex Articles
• Internship Experience
• Internship Opportunities
• Career Advice
• Career Opportunities
• Classroom Courses
• Distance Courses
• Online Courses
• International Events

Contract of Indemnity and Guarantee

This post is written by Srishti Rajpoot, a 2nd year law student at Gautam Buddha University

This article tries to define Contract of indemnity and guarantee. Also lastly it differentiates between them.

Contract of Indemnity

The word indemnity means a protection against loss. Especially in the form of a promise to pay, or payment for loss of money, goods, etc.

Under Indian Contract Act 1872 the concept of contract of indemnity is covered under section 124.

As per this section contract of Indemnity means ‘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 conduct of any other person’.

As per this provision loss may be caused, either-

• By the conduct of the promisor himself or
• By the conduct of any other person

Is insurance contract, Contract of indemnity?

In India insurance contract does not covered by definition of section 124.

In England-

Under English law indemnity carries a much wider meaning. It includes a contract to save the promise from a loss, whether it is caused by human agency or any other event like an accident and fire.

Contract of Guarantee-

Contract of Guarantee is defined under section 126 of India Contract Act.

It reads as-

“A contract of guarantee is a contract to perform the promise or discharge the liability, of a third person in case of his default.”

The section further provides that-

The person who gives the guarantee is called the “surety”, the person in respect of those defaults the guarantee is given called “principal debtor”, and the person to whom guarantee is given is called the “creditor”.

The object of contract of guarantee is to provide additional security to the creditor in the form of a promise by the surety to fulfill a certain obligations, in case the principal debtor fails to do that.

In every contract of guarantee there are three parties , the principal creditor, the principal debtor and the surety.

There are three contracts in the contract of guarantee.

• Firstly , principal debtor himself makes a promise in favor of creditor to perform a promise.
• Secondly , the surety undertakes to be liable towards the creditor if the principal debtor makes a default.
• Thirdly , an implied promise by the principal debtor in favor of surety that in case the surety has to discharge the liability of the default of the principal debtor, the principal debtor shall indemnify the surety for the same.

Main features of Contract of Guarantee-

• The contract may either oral or written. However in English law contract of guarantee should be in writing only.
• The contract of guarantee presupposes a principal debt or an obligation to be discharged by the principal debtor. But if no such principal debt there is a promise by one party in favor of another for compensating in certain situation, and the performance of this promise is not dependent upon the default of somebody else, it is a contract of indemnity.
• Benefit to the principal debtor is sufficient consideration. It is not necessary that there should be direct consideration between the creditor and the surety it is enough that the creditor had does something for the benefit of the principal debtor.
• Consent of surety should not have been obtained by misrepresentation or concealment of any material facts concerning the transaction.

Difference between Contract of Indemnity and Guarantee-

• There are two parties in a contract of indemnity. However, there are three parties in contract of guarantee.
• Contract of indemnity consists of only one contract. In contract of guarantee there are three contracts.
• The object of contract of guarantee is the security of the creditor. The contract of indemnity is made to protect the promise against some likely loss.
• In contract of guarantee the liability of the surety is only a secondary one. But in contract of indemnity, indemnifier is a primary one. He undertakes to be liable when the contemplated situation is there.
• In a contract of guarantee after the surety had discharge his liability and paid to the creditor, he steps into shoes of the creditor and he realize the payment made by him, from the principal debtor. In a contract of indemnity the loss falls on the indemnifier and therefore after the indemnifier had indemnified the indemnity holder he cannot recover the amount from anybody.
• In England a contract of guarantee should be in written. Whereas a contract of indemnity may be either oral or in writing. There is no such distinction in India. Same may be either oral or written.

Image from- https://slideplayer.com/slide/3458967/

You must be logged in to post a comment.

Type above and press Enter to search. Press Esc to cancel.

Subscribe For Latest Updates

Signup for our newsletter and get notified when we publish new articles for free!

Contract of Indemnity: Introduction, Meaning it's overview, case laws

Introduction to contract of indemnity:, meaning of indemnity:.

• Indemnifier: A person who promises to indemnify or pay for the losses is known as indemnifier.  
• Indemnified: A person for whom such a promise is made is known as indemnified or indemnity holder.
• There must be two parties.
• One of the parties must promise the other to pay for the loss incurred.
• The contract may be expressed or implied.
• It must satisfy the essentials of a valid contract.
• All damages.
• Dugdale v/s Lovering Facts: In this case, the plaintiff was in possession of certain trucks, which were claimed both by the defendant and K.P Colliery .The defendant demanded delivery of the trucks. As the plaintiff was aware that the ownership of the trucks was claimed by both the defendant and K.P Colliery, the plaintiff asked for an indemnity bond from the defendant. A reply was received by the plaintiff which only demanded delivery and did not mention any Indemnity bond. After which the plaintiff delivered the trucks to the defendant. Suit for Indemnity was filed by the plaintiff against the defendant and K.P Colliery. Judgement: It was held that there is no express contract of Indemnity, there is an implied contract of Indemnity. Defendant was liable to indemnify the plaintiff as the indemnity bond led to the creation of an implied promise.  
• Chand Bibi v/s Santosh Kumar Pal Facts: In this case,the defendant's father ,while acquiring specific property,promised to pay off the plaintiff's mortgage obligation and indemnify him if they were proven accountable for the debt. The plaintiff sued the defendant's father to enforce the agreement when the defendant's father failed to pay off the mortgage obligation. The court took into consideration the fact that the plaintiff has not yet suffered any loss for which he should be compensated. Judgement: It was held that the plaintiff has not suffered any losses and that the suit was premature so far as the cause of action on Indemnity was concerned.

Law Article in India

Please drop your comments, you may like.

Analysing Ajhudhi Prasad vs...

Principle of Preponderance ...

Mutual Rights And Liabiliti...

Contract of Agencies

Differences Between Estoppe...

Bailment And Its Concept: L...

Legal question & answers, lawyers in india - search by city.

Law Articles

How to file for mutual divorce in delhi.

How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Increased Age For Girls Marriage

It is hoped that the Prohibition of Child Marriage (Amendment) Bill, 2021, which intends to inc...

Facade of Social Media

One may very easily get absorbed in the lives of others as one scrolls through a Facebook news ...

Section 482 CrPc - Quashing Of FIR: Guid...

The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of t...

The Uniform Civil Code (UCC) in India: A...

The Uniform Civil Code (UCC) is a concept that proposes the unification of personal laws across...

Role Of Artificial Intelligence In Legal...

Artificial intelligence (AI) is revolutionizing various sectors of the economy, and the legal i...

File caveat In Supreme Court Instantly

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

CONTRACT OF INSURANCE AND CONTRACT OF INDEMNITY: A STUDY IN INDIAN SCENARIO

Insurance and Guarantee are the species of a same genus .i.e., indemnity or in other words the contract of insurance and the contract of Guarantee are the development on contract of indemnity. Similarly, the doctrine of Subrogation has been introduced to carry out the fundamental rule that of indemnity. Every contract of Insurance, except life assurance, is a contract of indemnity and no more than an indemnity. Under English Law, the word " indemnity " carries a much wider meaning than given to it under the Indian Act. Under English law, a contract of insurance (other than life insurance) is a contract of indemnity. Life insurance contract is, however, not a contract of indemnity, because in such a contract different consideration apply. A contract of life insurance, for instance, may provide the payment of a certain sum of money either on the death on a person or on the expiry of a stipulated period of time (even if the assured is still alive) Indian Contract Act does not specifically provide that there can be on implied contract of indemnity.

Related Papers

International Res Jour Managt Socio Human

From the last many years, India is facing the worst ever crisis of water. Due to the rapid growth of population, urbanization and industrialization, the water availability has become scarce. The global environment is changing everyday due to the over exploitation of the nature by the humans. Water is the basic requirement of life, but due to the high human indulgence, this unique gift of God is depleting gradually. Government is not being able to supply the drinking water to its citizens due to the crumbling of water infrastructure. That is why the effective conservation, management and distribution of water is the biggest challenge we are presently facing. Water Scarcity is a stark reality for some but an abstract concept to many. The demand of safe drinking water can be met with the combined initiative and action, keeping in mind that it is a fundamental and serious issue. Water management policy can be strengthened with holistic and people centric approach and by developing the decision support system. Thus, the challenges posed by water scarcity can be solved by harnessing of non conventional water resources together with trans boundary cooperation along with a comprehensive and integrated water management policy including advanced management and conservation. Present paper is designed to provide a coherent assessment of the causes, affect and legislative safeguards of water pollution. This study is intended to improve the inadequacies in law and the extent of its compliance at a local level. It will not only help in finding ways and means to tackle the water scarcity, but it will also help in generating awareness amongst the common people about the ever increasing problem of water. It deals with the review of various options for sustainable water resource management in India.

According to a legendary proverb " A man without education is a strange animal. " Dr. Babasaheb Ambedkar was of the opinion that education will liberate all and hence he called each and everyone to be educated, unite and fight against the odds of the society. The encyclopedia of education defines legal education as a " skill for human knowledge which is universally relevant to the lawyer " s art and which deserve special attention in educational institutions ". Former Justice Dada Dharmadhikari has rightly remarked that " legal education makes lawyer an expert who pleads for all like the doctor who prescribes for all, like the priest who preach for all and like the economist who plan for all ". It may really be termed as an art that enjoys the capability to make lawyer a best pleader for the public at large. Education does not mean mere " accumulation of information " or acquisition of degrees. It is the motivating force behind the character and personality of the student that mould him into a good human being. Education pulls out a person from ignorance, superstitions and narrow-minded selfishness and lead towards progress, liberation and social behavior respectively. Even an old Sanskrit proverb state that education which leads to liberation; liberation from ignorance which shrouds the mind; liberation from superstition which paralyses efforts; liberation from prejudice which blinds the vision of truth.

Human rights are basic rights and freedoms to which all humans are entitled, often held to include the right to life and liberty, freedom of thought and expression, and equality before the law. Human Rights are inherent and in alienable rights which are due to an individual by virtue of his/her being a human being. These rights are necessary to ensure the dignity of every person as a human being irrespective of one‟s race, religion, nationality, language, sex or any other factor. Human rights are vast, varied and dynamic. They represent so many issues that everything and anything relating to human beings come under its Jurisdiction. They also have significant contribution towards both national policies and politics as well as relations with other international communities.

Intestacy is of two kinds – total or partial. A man may die partly intestate and partly testate, e.g. where the will contains several bequests to several legatees, but there is no disposition of the residue, he dies intestate as regards the residue. The word intestate is defined in sec 55 of the Administration of Estate Act ‘Intestate includes a person who leaves a will but dies intestate as to some beneficial interest in his real or personal estate.’

Dinkiso david

Brigade fountainsquare

Brigade Groups is a distinctive real-estate Brand of India with well-heeled history in the field of Property Development. The brand has associated itself in various platforms of real-estate domain that includes Residential, Commercial, Retail, Hospitality and Education sectors. Brigade Groups has been operating since 1986 and is head-quartered in Bangalore and has its branch offices in various cities of the country and has a representative office in Dubai. The firm has established its landmark residential ventures in Bangalore, Mysore, Chennai, Kochi, Hyderabad and Chikmagalur. https://www.brigadefountainsquare.org.in/

Suresh Rathi

Anthonia Titi

User education is one of the important services of the library organised each year for fresh students into higher institutions of learning. It is an academic programme designed by academic libraries to educate its user’s especially fresh men on how to effectively utilise library resources and its services. The main objective of this study was to determine how to improve the effectiveness of user education programme for fresh students in selected colleges in Nasarawa State, Nigeria. The study adopted the descriptive survey design with a study population of 5,023 N.C.E II and N.D II registered library users of the three colleges studied out of which a sample of 252 respondents were selected using the stratified random sampling technique with the proportional allocation method using a sample fraction of 5%. The questionnaire was the main research instrument used for the collection of data which was administered in the three college libraries. Data was analysed using frequency distribut...

Holger Zeltwanger

In order to standardize network system applications independently of the device implementation it is necessary to introduce the concept of virtual device interfaces. Several CANopen application profiles using the concept of virtual devices will be introduced briefly. In particular, there are methods how to define virtual device interfaces and how to describe a default PDO communication scheme allowing peer-to-peer data transmission. Hints are given on how to overcome the limitations regarding the number PDOs and object dictionary entries.

RELATED PAPERS

Cell Calcium

Maria Cecilia Hidalgo

Amauri Ferreira

Journal of Youth and Adolescence

Lecture Notes in Applied and Computational Mechanics

Costas Papadimitriou

Amadin Wise

Proceedings of the 2016 ACM International Conference on Interactive Surfaces and Spaces

Ali Mazalek

Ernesto Damiani

Céline Mougenot

Physical Review A

Nikolaos Efremidis

Eğitim Her Yerde

Sefa Sezer , Sefa Sezer

Journal of Probability and Statistics

Shahjahan Khan

Bone Marrow Transplantation

Christian Wiedermann

TADWIN: Jurnal Ilmu Perpustakaan dan Informasi

Anggi Tridana

HAL (Le Centre pour la Communication Scientifique Directe)

Arnaud Mesgouez

Journal of Micropalaeontology

Dietmar Keyser

American Journal of Epidemiology

Susan Picavet

Chioniso Dube

Journal of Computational and Theoretical Nanoscience

Sakir Erkoc

International Journal of Applied Business and Management Sciences

Tonbra Baridei

23. Phạm Ngọc Nhi

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

• Find a Lawyer
• Ask a Lawyer
• Research the Law
• Law Schools
• Laws & Regs
• Newsletters
• Justia Connect
• Pro Membership
• Basic Membership
• Justia Lawyer Directory
• Platinum Placements
• Gold Placements
• Justia Elevate
• Justia Amplify
• PPC Management
• Google Business Profile
• Social Media
• Justia Onward Blog

This docket was last retrieved on April 9, 2024. A more recent docket listing may be available from PACER .

Use the links below to access additional information about this case on the US Court's PACER system. A subscription to PACER is required.

Access this case on the Illinois Northern District Court's Electronic Court Filings (ECF) System

• Search for Party Aliases
• Associated Cases
• Case File Location
• Case Summary
• Docket Report
• History/Documents
• Related Transactions
• Check Status

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?

Subscribe to Justia's Free Newsletters featuring summaries of federal and state court opinions .

• Bankruptcy Lawyers
• Business Lawyers
• Criminal Lawyers
• Employment Lawyers
• Estate Planning Lawyers
• Family Lawyers
• Personal Injury Lawyers
• Estate Planning
• Personal Injury
• Business Formation
• Business Operations
• Intellectual Property
• International Trade
• Real Estate
• Financial Aid
• Course Outlines
• Law Journals
• US Constitution
• Regulations
• Supreme Court
• Circuit Courts
• District Courts
• Dockets & Filings
• State Constitutions
• State Codes
• State Case Law
• Legal Blogs
• Business Forms
• Product Recalls
• Justia Connect Membership
• Justia Premium Placements
• Justia Elevate (SEO, Websites)
• Justia Amplify (PPC, GBP)
• Testimonials

• Share full article

Advertisement

Supported by

New York Is Winding Down Contract With Migrant Services Operator

DocGo, which has a $432 million contract with the city, faced allegations of providing migrants with false papers, wasting food and hiring unlicensed security guards.

By Jay Root

New York City will soon part ways with DocGo, which has provided services to migrants under a lucrative $432 million contract, city officials said Tuesday.

Last spring, the company, a medical services provider that had multimillion-dollar contracts to provide Covid tests and vaccinations, landed a no-bid contract to house and care for migrants in the city and upstate despite having no broad experience dealing with asylum seekers.

But the company quickly faced allegations that its employees or subcontractors had mistreated and lied to migrants, provided them with fake work papers, wasted staggering amounts of food and hired unlicensed security guards. In the wake of reporting by The New York Times and other news outlets, Attorney General Letitia James started an investigation into DocGo over possible violations of state or federal laws regarding the treatment of people in its care.

In a written statement Tuesday, as first reported by Politico, Mayor Eric Adams’s chief of staff, Camille Joseph Varlack, said the city would not renew DocGo’s contract to house and care for migrants in New York City hotels when it expires in early May, one year after it took effect. A Texas-based company, Garner Environmental Services, will take over those services temporarily — at a cost of $10 less per person, per night than DocGo receives, officials said.

“This will ultimately allow the city to save more money and will allow others, including nonprofits and internationally recognized resettlement providers, to apply to do this critical work, and ensures we are continuing to use city funds as efficiently and effectively as possible,” Ms. Varlack said.

The city will begin a competitive bidding process to find a new provider to take over the work.

But Ms. Varlack said the city was working on a temporary contract extension for DocGo’s services upstate in order to minimize disruptions to the 1,800 or so migrants, including school-age children, who are in DocGo’s care at cut-rate motels from Westchester County to Buffalo. City Hall says the extension will last until a new provider is selected in the competitive bidding process.

In a statement, a DocGo spokesman, Rob Ford, said the company would continue to provide services to migrants under its upstate contract extension. The city hospital system, NYC Health + Hospitals, separately awarded migrant services contracts to DocGo, including one for handling intake at the Roosevelt Hotel in Midtown Manhattan. The status of those contracts was not immediately clear.

NYC Health + Hospitals did not immediately respond to requests for comment on Tuesday.

“DocGo is immensely proud of the exceptional work that our team has accomplished and continues to perform,” Mr. Ford said. “At the peak of the crisis, when New York City was seeing over 600 new arrivals each day, the city’s flex housing program provided essential capacity and helped ensure families and children did not have to sleep on the street.”

The New York City comptroller, Brad Lander, who sharply criticized the Adams administration for hiring DocGo and used his power to limit the mayor’s ability to enter into similar emergency contracting deals, said he was relieved that the company was on the way out.

“After my office repeatedly sounded the alarm on how ill-prepared DocGo was to provide adequate services to asylum seekers, I’m relieved that the administration finally came to its senses,” Mr. Lander said. Still, he said he remained concerned about the city’s use of emergency contracts to care for migrants.

“The city’s haphazard management of these contracts, especially DocGo, exemplifies the pitfalls of continuing to treat asylum seekers like an emergency for two years, rather than providing services that will get them work authorization, status, security, safety so that they can thrive in New York,” Mr. Lander said.

City Councilwoman Gale Brewer, who for months has been calling on the city to use nonprofit providers to help migrants, said the city’s decision to end the no-bid contract was “long overdue.”

“And much money down the drain,” she said.

Jay Root is an investigative reporter based in Albany, N.Y., covering the people and events influencing — and influenced by — state and local government. More about Jay Root

The Migrant Crisis in New York City

The arrival of more than 100,000 migrants over the past year has become a crisis for the city’s shelter system, schools and budget..

The Crisis, Explained: Why are large numbers of migrants coming to New York City? And how is the city responding? Here is what to know .

Debit Cards For Migrants: New York City officials are moving ahead with a contentious plan to give migrant families debit cards for food and baby supplies, with the first cards being distributed  to a small handful of new arrivals.

Missing School to Work : Migrant children selling candy during school hours can frequently be seen in the subway. The situation breaks several laws and rules, but whose job is it to do something about it ?

A Growing Group: Amid the influx of people from Latin America, thousands of Chinese migrants  have also made their way to New York City, with many crossing into the United States through the southern border.

A Struggling Relocation Effort: A $25 million program designed to resettle 1,250 migrant families across New York State is floundering, having moved only about 170 households  and barely easing the burden on the city’s shelter system.

A Plan Under Fire: A pilot program in New York City to give 500 migrant families with children debit cards to help them pay for food and baby supplies became an easy target for right-wing critics. Here’s what to know .