Contract of Indemnity by Kalyani
Contract of Indemnity is defined under section 124 of Indian Contract Act.
Section 124 - A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person is a "contract of Indemnity".
Illustration - A contracts to indemnify B against the consequences of any proceedings which C may take against B in respect of a certain sum of Rs 200. This is a contract of indemnity.
This definition provides the following essential elements –
1. There must be a loss.
2. The loss must be caused either by the promisor or by any other person (in Indian context loss is to be caused by only by a human agency.)
3. Indemnifier is liable only for the loss. Thus, it is clear that this contract is contingent in nature and is enforceable only when the loss occurs.