What is an indemnity clause?

An indemnity clause is a contractual agreement between two parties that states one party will be held harmless against any potential lawsuits or damages arising from a particular situation. This clause states that the indemnifying party will reimburse the other party for any losses incurred due to the other party’s actions. Indemnity clauses are most commonly used in business contracts and can also be used to protect workers from the potential risk of liability due to their job duties. In North Carolina, indemnity clauses are evaluated under contract law principles and are generally enforceable. However, the court will not enforce a clause that is so one-sided that it would violate public policy or the law. Depending on the nature of the clause and the agreement between the parties, legal protection may be available to the non-breaching party. It is important for parties to a contract to understand and review the indemnity clause of an agreement. This is especially true in North Carolina, as the court may strike down an indemnity clause that is deemed to be overly one-sided or against public policy. Therefore, it is important for the parties to ensure that the indemnity clause is fair and balanced so that both parties are protected.

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