Contract of Indemnity Bare Act
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The contract of indemnity is a legal agreement between two parties, where one party agrees to compensate the other party for any loss or damage that may occur during a specific transaction or event. This contract is governed by the Indian Contract Act of 1872 and is defined as a contract where one party promises to compensate the other party for any loss or damage caused by the occurrence of a specified event.
As per the bare act, a contract of indemnity can be made either expressly or by implication. An express contract of indemnity is when the parties agree to indemnify each other in writing or verbally. On the other hand, an implied contract of indemnity is when the indemnity is inferred from the conduct of the parties or from the specific circumstances of the transaction.
The contract of indemnity can be a unilateral or a bilateral contract. A unilateral contract of indemnity is when only one party gives the indemnity, i.e. the indemnifier, and the other party, i.e. the indemnified, does not offer any indemnity in return. A bilateral contract of indemnity is when both parties agree to indemnify each other.
The bare act further states that a contract of indemnity can also be conditional or unconditional. A conditional contract of indemnity is when the indemnity is given subject to certain conditions. For example, an insurance policy might provide indemnity only if the loss or damage is caused by a specific event. An unconditional contract of indemnity is when the indemnity is given without any conditions, obligations, or restrictions.
It is important to note that a contract of indemnity cannot be made for certain types of losses or damages, such as those caused by the willful default of the indemnified party or losses due to negligence on the part of the indemnified party.
In conclusion, the contract of indemnity bare act lays down the legal framework for indemnity agreements in India. It is essential for businesses and individuals to be aware of the provisions of the act when entering into such agreements, to ensure that their interests are protected.