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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  2. Promise or accident or act of god is included under contract of indemnity ?

    If answer is no,then please explain the
    The term of promise and accident