A contractual indemnity agreement is a transfer of risk between parties with the intent to prevent loss, or compensate for a loss, which may occur as a result of a specified event. To indemnify someone is to absorb the losses of that party, rather than seeking compensation from that party, or to compensate that party if something causes them to experience loss, damages, or a lawsuit. An indemnity agreement helps manage the risks by protecting against the effects of an act, a default, or negligence.
Our New Orleans commercial litigation attorney and legal team can help you with the following indemnity clauses :
- Bare Indemnities – One party indemnifies another for all liabilities or losses incurred in connection with specified events or circumstances, but without setting any specific limitations.
- Reverse or Reflexive Indemnities – One party indemnifies another against losses incurred by the other party’s own acts or omissions.
- Proportionate or Limited Indemnities – One party indemnifies another against losses except those incurred by the other party’s own acts or omissions, breach of contract or willful misconduct.
- Third Party Indemnities – One party indemnifies another against liabilities to or claims by a third party.
- Financing Indemnities – One party indemnifies another against losses incurred if a third party fails to honor the financial obligations to the second party.
The language and scope of an indemnity provision must be very precise in order to prevent any future misunderstandings, should the indemnity be triggered. Therefore, every indemnity clause must be tailored to the specific situation as well as the laws of the jurisdiction in which will govern the contract.