Indemnity
In an agency context, a principal may be obligated to indemnify their agent for liabilities incurred while carrying out responsibilities under the relationship.No such formal requirement exists in respect of indemnities (involving the assumption of primary liability; to pay irrespective of another's default) which are enforceable even if made orally.The property and funds are exchanged, but indemnity may be granted for costs necessarily incurred to the innocent party pursuant to the contract.The distinction between indemnity and damages is subtle and may be differentiated by considering the roots of the law of obligations: how can money be paid if the defendant is not at fault?Many private contracts and terms of service in the United States require one party (indemnitor, typically a customer) to pay (indemnify) the other side's costs for legal claims arising from the relationship.US law "is violated by any indemnification agreement that, without statutory authorization, imposes on the United States an open-ended, potentially unrestricted liability.[14] In 2017, the Utah Supreme Court stated, "By statute, a contractual provision requiring a purchaser of a product to indemnify a manufacturer is 'void and unenforceable' in certain circumstances.[19] In 1979, the Minnesota Supreme Court ruled that a subcontractor must indemnify the builder for damages that it caused, according to an indemnification clause in their purchase order.[21] Indemnities can be expensive enough to bankrupt a company that pays them: "If manufacturers ... are to survive, they will need liability insurance, as well as favorable contracts with retailers.If you look at a big retailers, such as Trader Joe's or Costco or Walmart or Randalls, very often there will be an indemnity provision providing that, if you want to sell a product in our stores, and if it gets someone sick or if it has to be recalled, and it's your fault, you must pay us back for that.[41][42] In 1807–1808, in Prussia, statesman Baron Heinrich vom Stein introduced a series of reforms, the principal of which was the abolition of serfdom with indemnification to territorial lords.[44] In Peru, Antonio Salinas y Castañeda (1810–1874), a wealthy Peruvian landowner and conservative politician, led the meeting of the main landowners of the country for an indemnity after slavery abolition and ruled the commission who promoted the immigration of Asians to replace former slaves as a workforce during Ramón Castilla government.