How To Write A Hold Harmless or Indemnity Agreement

Written by J. Hirby and Fact Checked by The Law Dictionary Staff  

To hold harmless or to grant indemnity to an individual or business entity essentially means that a party in a contract accepts full responsibility in all situations involving damages, injury and liability claims. These agreements can be created as standalone declarations, but they can also be incorporated as clauses or provisions in other legally binding contracts.

Writing the Preamble

The parties in an indemnity agreement are known as the promisor and promisee or the indemnitor and the indemnitee. Their legal names, places of residence and date of execution should headline the contract. This initial section should be followed by the background, which must state the desire by the promisor to hold the other party harmless and extend protection should there be situations of personal liability, civil lawsuits, regulatory complaints, damages, injury, or losses that may arise due to a certain activity.

Writing the Consideration

As with other contracts, a consideration must be clearly stated for the purpose of making the indemnity agreement a legally binding document. Within the consideration, the activity alluded to in the preamble must be defined. Other definitions within this section of the agreement shall include:

Potential third parties
Claims
Notices
Indemnity
Expenses

Stating the Indemnification

In this section, the promisor makes a firm commitment to assume full responsibility for a number of liabilities. It is important to note that this promise can only extend to the civil realm, which means that any violations of the law that may lead to criminal charges cannot be absolved by any of the parties.

Any losses caused by gross negligence and malicious intention of the promisee may be excluded from the indemnification section.

Stating the Exceptions

Whereas criminal acts, gross negligence and malicious intent can be easily excluded from a hold harmless contract, the parties may also agree to exclude certain losses such as previous debts and other existing legal obligations.

Notice of Claim Mechanism

A valid process of loss and claim notification must be clearly stated in the contract. This may include the time frame to deliver the notice, the address, and the extent of the information required for the purpose of making the notice valid.

Cooperation and Enforcement

The promisee will have to agree to follow certain procedures to enable the indemnity agreement. For example, the promisor may set limits for payment of legal fees. An enforcement provision is recommended insofar as both parties agreeing to seek relief in civil court and asking for attorney’s fees and court costs.

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