Indemnity Clause

“Indemnification” is a common method for the risk allocation in contracts in the Common Law; according to which, one party is liable to indemnify the other party against the losses resulted from his anticipatory act, from the indemnitee’s liabilities or from a third party’s claim. This institution has emerged from the customs formed amongst the merchants, gradually recognized by the legal systems. In this paper, we are going to examine the validity of the indemnity clause by using the relevant legal principles and rules. Studies show that the indemnity clauses are typically being considered valid, except in cases of indemnitee’s deliberative act or his gross negligence. In this paper, the concept of indemnity clause and its validity and variety along with the similar legal institutions in the Iranian law and the Shiite jurisprudence are being studied.