Indemnity / a contractual agreement made between different parties to compensate for any damages or losses.

1. payment to reimburse a specific quantifiable monetary loss or expense incurred
2. (of commission) paid in full at commencement of a contract on the assumption that this will remain in force for at least a certain minimum period. if the contract is terminated within this period part of the commission may be required to be refunded.

an agreement in which one person is answerable for compensating the losses of another. indemnities are common features of many commercial contracts where one party is buying goods or a service off another, and wants to be sure that if it will be compensated if the seller has misled it about something.for example, a company that buys a plot of land might require the seller to confirm in the contract that it knows of no environmental liability relating to the land, and will also require an indemnity clause in the contact obliging the seller to make good any losses if it turns out that the land does have some environmental liability.of course, an indemnity in a contact is only worth something is the person or company giving it has the money to make good the losses.