What is Contract of Indemnity
To Define Contract of indemnity, it consists
- Promise on the part of one party (Promiser)
- To save the other party from loss and damage (Promisee)
- Caused by the conduct of promisor or may other person.
Essentials
- Promise to save from loan
- Actual loss in necessary
- It is a contingent contract based on uncertain even
Illustration No. 1 If say contract between A & B, A will pay a debt of Rs. 15,000/- to B. A wants to sign a contract or enter into a contract with C and promise to save him from loss or to indemnity against any action brought by B against the amount of Rs. 15,000/-. This will be a contract of indemnity.
Illustration No. 2 Mr. X is a surgeon and currently doing is practice in India. Mr. Y offers him Job in Pakistan and asks him to start his practice here. Mr. Y also promises him that he will save him from loss incurred due to practice here. This is a contract of indemnity.
Explanation of Contract of Indemnity
According to contract of indmentiy there are two parties the one person who promises to indemnity is called the indemnifier and that person who gets indemnity is called indemnified in other words indemnity holder. As per the common law bot the indemnifier and indemnified could not be called until and unless the indemnified ha incurred actual loss or damage.
