Indemnity
Indemnity refers to a legal obligation where one party compensates another for potential losses or damages arising from specific events. In the UAE, indemnity clauses are commonly found in commercial contracts, insurance policies, and employment agreements, ensuring that one party is financially protected against risks. The UAE Civil Transactions Law (Federal Law No. 5 of 1985) recognizes indemnity agreements, but overly broad or unfair clauses may be challenged in court. Businesses must ensure that indemnity clauses clearly define liabilities, exclusions, and financial limits to avoid disputes.
