What is the difference between an indemnification agreement and a hold harmless agreement in construction contracts?

An indemnification agreement and a hold harmless agreement are key components of construction contracts in New Jersey. Both agreements revolve around the idea of one party protecting the other from any financial losses that may arise. An indemnification agreement requires one party to be legally bound to reimburse the other party for any claims, losses, or damages that arise as a result of the contracted activity. The party who is providing the indemnity must take full financial responsibility for any claims, losses, or damages that occur due to the agreement. A hold harmless agreement is similar to an indemnification agreement, but it does not require a legally binding commitment from one party to another. Instead, the party providing the agreement is protecting the other party from any claims, losses, or damages that may arise from the agreement. This type of agreement does not require any financial responsibility to be assumed; it simply provides a level of protection from any potential financial losses. In summary, an indemnification agreement requires one party to legally obligated to the other party to reimburse them for any claims, losses, or damages that arise due to the agreement. A hold harmless agreement does not require a legally binding commitment, but it provides a level of protection from any financial losses as a result of the agreement.

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What is the difference between an indemnification agreement and a hold harmless agreement in construction contracts?

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