Archive for the ‘Commercial Property’ Category

Indemnity Does Not Give Unlimited Liability

diggerAn undefended claim in damages cannot merely he ‘handed over’ to a person who has indemnified the party settling the claim as a recent case involving a building contract dispute bears out.

 
When a claim was made against a contractor, the claim was accepted by the  contractor’s liquidator. Since there was an indemnity in favour of that company, which was given by another company, that company was sued.
 
In court the judge concluded that while the indemnity was effective, the indemnifying company was not automatically liable for the agreed sum of damages. In order for it to be bound, the company in liquidation would have to prove that it was liable to pay that sum.
 
Indemnities do not necessarily give ‘blanket coverage’. Giving or attempting to enforce an indemnity should only be undertaken with professional advice.

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