Also known as: rights to indemnification · right of indemnification · rights of indemnification · indemnification right · right of indemnity
Written by attorneys · grounded in primary & secondary sources — see below
A legal entitlement by which one party recovers from another the full amount of a liability incurred to a third party. The right arises by contract, statute, or equity when the indemnitee has discharged an obligation that the indemnitor ultimately bears. It shifts the entire loss rather than apportioning it.
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The City of Lakeview settled a pedestrian injury suit after traffic signals malfunctioned. Lakeview then sued its maintenance contractor Apex for contribution. Their contract required Lakeview to indemnify Apex for claims arising from city engineers' placement decisions that caused the malfunction. Because the indemnity right existed, Lakeview could not obtain contribution from Apex for the same harm.
Luis, a partner at GreenSprout Farms, signed a supply contract and supervised emergency harvesting during a flood. Consumers sued him individually after contaminated produce caused illness. Luis settled reasonably and sought reimbursement from the partnership. The partnership refused, but Luis incurred the liability solely in his partner capacity without breaching duties, so the firm must indemnify him for the settlement and defense costs.
When one tortfeasor holds a right of indemnity against another for the same harm, neither may seek contribution from the other. Indemnity shifts the entire loss to the indemnitor, displacing any apportionment under contribution rules. This prevents partial re-shifting of liability back to the indemnified party.
Supporting sources
A partnership must indemnify a partner for liabilities incurred by reason of the partner's capacity as a partner, provided the liability does not arise from the partner's breach of duties. The partner need not show an express guarantee from another partner. Intentional misconduct typically bars indemnity, but emergency decisions without gross negligence or disloyalty support the right.
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A right of indemnification created by statute or bylaw and in effect at the time of the act generally cannot be eliminated or impaired by later amendment unless the creating provision explicitly authorizes such change. A corporation may limit rights prospectively through its articles, but existing rights remain protected against retroactive impairment.
Supporting sources
Indemnity shifts the entire loss from one tortfeasor to another based on contract or equity, while contribution apportions the loss according to equitable shares. When indemnity applies, it serves as the exclusive mechanism for reallocating liability between the parties and bars contribution claims for the same harm.
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