Legal Definitions - indemnity clause

An indemnity clause is a part of a contract where one party agrees to take responsibility for any harm or liability that the other party may face. This clause is also known as a hold-harmless or save-harmless clause. It is the opposite of an exemption clause, which relieves a party of liability.

Here are some examples of indemnity clauses:

• When renting a car, the rental agreement may include an indemnity clause stating that the renter is responsible for any damages to the car during the rental period.
• A construction contract may have an indemnity clause where the contractor agrees to indemnify the owner against any claims or damages arising from the construction work.
• A software license agreement may include an indemnity clause where the software provider agrees to indemnify the licensee against any claims of intellectual propertyinfringement.

These examples illustrate how an indemnity clause can shift the risk of harm or liability from one party to another. In each case, the party with more bargaining power (the car rental company, the construction contractor, or the software provider) is requiring the other party to take on more risk.