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Contract & Commercial Law vocabulary · Contract Terms & Clauses

Indemnity

Meaning in contract & commercial law, with examples

/ɪnˈdemnəti/nounCore term

In contract & commercial law, indemnity means: A promise by one party to cover specific losses or costs that the other party suffers, for example claims brought against it by third parties.

In Turkish: tazmin taahhüdü, tazmin yükümlülüğü, tazminat

How it is used

Very common in IT, supply and M&A contracts, and often heavily negotiated. The verb is 'indemnify': one party indemnifies the other 'against' or 'from and against' losses. An indemnity can make it easier to recover a loss than an ordinary claim for damages.

Example sentences

  1. The licensor will indemnify the customer against any claim that the software infringes a patent.

  2. We asked the seller for a specific indemnity covering the unpaid taxes.

Common collocations

  • indemnify against
  • give an indemnity
  • indemnity clause
  • specific indemnity
  • claim under an indemnity
  • liabilityLegal responsibility for something, especially the duty to pay compensation for loss or harm; in accounting, also a debt that a business owes.
  • warrantyA promise in a contract that a fact is true or that goods or services meet a certain standard; if it proves wrong, the other party can usually claim damages.
  • limitation of liabilityA contract clause that caps or restricts the amount or the types of loss a party must pay for if something goes wrong.
  • damagesMoney that a court or tribunal orders one party to pay another as compensation for loss caused by a breach of contract or another legal wrong.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Contract Terms & Clauses

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This page explains English vocabulary for learners. It is not legal advice.