CALGARY INDEMNITY AGREEMENT | LAWYER

Contact Neufeld Legal PC at 403-400-4092 or Chris@NeufeldLegal.com

An indemnity agreement (also known as a hold harmless agreement, no-fault agreement, release of liability, or waiver of liability) is a legal contract where one party (the indemnitor) agrees to protect another party (the indemnitee) from financial loss, damages, or legal liability that may arise from specific actions or events.

The indemnitor promises to compensate the indemnitee for certain losses they might incur, often due to the actions or negligence of the indemnitor or a third party. As such, an indemnity agreement helps to shift and manage risk between parties in a transaction or activity, with its key attributes including:

  • Risk Transfer: The primary purpose is to allocate risk from one party to another.

  • Compensation: The indemnitor agrees to pay for specific losses, which can include judgments, settlements, legal fees, and other expenses.

  • Protection from Third-Party Claims: Indemnity agreements often protect the indemnitee from lawsuits or claims brought by third parties.

  • Scope of Coverage: The agreement will clearly define what types of losses or events are covered and what is excluded.

  • Notification and Defense: It usually outlines how the indemnitee will notify the indemnitor of a claim and how the indemnitor can defend against it.

Indemnity agreements are crucial in situations where there is inherent risk or potential for liability. Indemnity agreements are commonly used in a variety of contexts to protect parties from unforeseen financial burdens, which can include:

  • High-Risk Activities or Services:

    • Construction projects: To protect project owners or general contractors from liabilities related to workplace accidents, property damage, or subcontractor actions.

    • Outdoor events or activities: For organizers to be protected from injuries to participants.

    • Providing high-risk services: Where a service provider could cause damage or injury.

  • Use of Property or Equipment:

    • Rental agreements (cars, equipment, property): Car rental companies often require renters to sign an indemnity agreement, making the renter responsible for damages or legal action resulting from their use of the car. Landlords may use them to make tenants responsible for injuries on the property or damage to the rental.

    • Pet kennels/daycares: To relieve the facility of liability if a pet gets injured or sick.

  • Commercial Contracts:

    • Service contracts: When hiring a party to provide a service for your business, to protect against their negligence or breach of contract.

    • Supply agreements: A retailer buying goods from a factory might indemnify the factory against losses if the retailer fails to take the goods.

    • Outsourcing and technology contracts: To clarify responsibilities and liabilities, especially concerning data breaches or service failures.

  • Intellectual Property and Licensing:

    • When a contract involves using or transferring intellectual property, indemnity clauses protect against infringement claims, ensuring the licensor covers losses if the IP infringes on others' rights.

  • Corporate and Financial Transactions:

    • Mergers and acquisitions: To indemnify a purchaser against losses from breaches of representations and warranties by the seller.

    • Loan agreements: Borrowers may indemnify lenders against losses related to the loan or borrower (e.g., environmental liabilities).

    • Board of Directors: Companies may have indemnity agreements with board members to protect them from legal or monetary issues on behalf of the company.

Our law firm provides strategic legal advice, review and drafting of commercial business contracts to businesses in Calgary and beyond (including, indemnity agreement, a.k.a. hold harmless agreements, no-fault agreements, releases of liability, or waivers of liability). Schedule an initial consultation with our law firm to learn more about how our extensive business contract legal experience can benefit your business. Call 403-400-4092 or email our law firm at Chris@NeufeldLegal.com today.

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