What is an indemnification clause?

An indemnification clause is a contractual provision that requires one of the parties to a contract to protect the other party from certain future losses. It typically requires one party (the indemnifying party) to pay the other party (the indemnified party) any sums that the indemnified party has been found legally liable for due to a breach of the contract. It can also be used to require the indemnifying party to pay for any damages that may arise from natural disasters or other events that are out of either party’s control. Indemnification clauses are commonly found in commercial contracts and agreement where one party, such as a contractor, agrees to protect the other party from any financial losses. In New Hampshire, there are specific rules that apply to indemnification clauses to ensure that the clause is in compliance with the law. For example, the language of the clause must be clear and unambiguous so that each party is aware of their respective rights and liabilities. Contracts that include an indemnification clause must also be consistent with the other terms of the contract and should not violate public policy. The purpose of an indemnification clause is to protect the parties to the contract and reduce the risk of litigation or financial claims arising from a breach. It is important to understand the legal implications of an indemnification clause before entering into a contract in New Hampshire.

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