Indemnity
Definition: Section 124 of the Indian Contract Act, 1872, defines a 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.
Key Points:
Parties Involved: There are two parties in a contract of indemnity:
- The indemnifier: The person who promises to indemnify or make good the loss.
- The indemnified or indemnity holder: The person who is protected against the loss.
Nature of Contract: It is a contingent contract, meaning it is enforceable only when the specified loss occurs.
Essence: The core idea is to provide financial security to the indemnity holder against potential losses.
