Indian Commercial Law and Practice

It  is quiet common to find in American law centred contracts indemnity clauses which do not limit their scope to third party liability cover or statutory liability cover and instead become very broad statements encompassing all sorts of damages, claims, losses and legal expenses arising “directly or indirectly”  from “breach of the contract” or “negligence of performance” .   This trend may be more seen in IT services Agreement.

This raises the question if indemnity should cover  losses for breach of contract? Or should it limit its scope to covering losses or liabilities which in law can be claimed only from one of the parties? In common law, suit for damages (S 73 and 74  of Indian Contract Act, 1872) is the remedy available to the non defaulting party against the defaulting party to the contract. This remedy is generally available in law whether or not there is express provision in the contract…

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