What is an indemnification clause?

An indemnification clause is a legal term found in contracts, including those in the state of Texas. It is a clause that requires one party in a contract to compensate the other party for any losses or damages that may arise out of the obligations associated with the contract. For example, if party A (the indemnitor) agrees to indemnify party B (the indemnitee) for any losses or damages that arise from party A’s breach of contract, party A would be required to pay party B for any such losses. Indemnification clauses are commonly found in contracts, such as those for construction, insurance, and other services, in order to protect the other party from financial harm caused by the breach of contract. Indemnification clauses typically hold the indemnitor to strict liability, meaning that the indemnitor is responsible for any damages or losses that arise regardless of fault. In Texas, courts will usually enforce an indemnification clause, as long as the clause is not unreasonable and it is included in a valid, properly executed contract.

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