Limit
Guest
(Querist) 06 March 2013
This query is : Resolved
Companies give Indemnity bonds to other entities during carrying out their business. What is the overall limit as per law in terms of amount in the case of a companyfor giving indemnity bonds from time to time to different entities for doing works of such entities.
Guest
(Querist) 06 March 2013
Other experts are requested to advise please.
Guest
(Expert) 06 March 2013
Instead of discussing your real problem, you preferred to put a question like a student from his class teacher. Better discuss the real problem, if any, you are facing.
R.K Nanda
(Expert) 06 March 2013
no fixed limit for it.
V R SHROFF
(Expert) 06 March 2013
No Limit for specific Indemnity bonds, chg as per facts
Raj Kumar Makkad
(Expert) 06 March 2013
What is your relationship with the given query?
Guest
(Querist) 07 March 2013
My known to has a private company and the company is not financially well. It has been asked to give indemnity in respect of some work order, hence the query.
Please opine.
prabhakar singh
(Expert) 07 March 2013
An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. The right to indemnity and the duty to indemnify ordinarily stem from a contractual agreement, which generally protects against liability, loss, or damage.
Indemnity in the legal sense may also refer to an exemption from liability for damages.
The concept of indemnity is based on a contractual agreement made between two parties, in which one party agrees to pay for potential losses or damages caused by the other party. A typical example is an insurance contract, whereby one party (the insurer) agrees to compensate the other (the insured) for any damages or losses, in return for premiums paid by the insured to the insurer.
So unless the SUM to be indemnified is pre quantified in the indemnity clause it self,the liability would be any thing up to limit of losses or damages caused .
Raj Kumar Makkad
(Expert) 07 March 2013
I completely endorse the views of Mr. Singh.
Guest
(Querist) 07 March 2013
Thanks. In this particular case the indemnity is upto rupees 90 lakh while company is not financially well. So query is can this company give indemnity upto that amount legally particulary when it has already given such indemnities to other entities also. Query is from overall limit point of view.
Please throw light.
prabhakar singh
(Expert) 07 March 2013
What liability one wants to undertake is one's own discretion,law does not create any bar or restrain over one who is financially not sound for furnishing an indemnity for a liability which may arise in future.The choice is of person in whose favor the indemnity would be to consider the fact that co.would be able to meet the liability,if at all it arises at a future date.
