JAIIB LRAB Unit 41 - Contracts of Indemnity

A Contract of Indemnity is a contract by which one party promises to save the other from loss likely to be caused to him. This loss can be, either by the conduct of the promisor himself or by the conduct of any other person.

RIGHTS OF INDEMNITY HOLDER

The indemnity holder (i.e. the promisee or the person who is indemnified) has the following rights when sued (i.e. when a legal action is taken against the person who has indemnified).

The promisee is entitled to recover from the promisor, in respect of the matter to which the promise to indemnify applies:

1. All damages which he may be compelled to pay in any suit.
2. All costs which he may be compelled to pay in any suit.
3. All sums paid in compromise, not contrary to indemnity.