Shailendra's Sphere

As per Black’s Law Dictionary [1] , “Indemnity is defined as a collateral contract or assurance, by which one person engages to secure another against an anticipated loss or to prevent him from being damnified by the legal consequences of an act or forbearance on the part of one of the parties or of some third person.” It is a promise to make good the loss of other party which may be caused due to damage. In simple language, it is a transfer or management of risk to prevent loss or compensate for a loss which may occur as a result of a specified event against a contractual default or party’s negligence. Further, it means one party agrees to pay losses suffered by another to a third party. Section 124 of the Indian Contract Act, 1872 defines 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, is called a “contract of indemnity.” Why Indemnity is Import