Contract of Indemnity:
According to Section 124 of the Indian Contract Act, “A contract, by which one party promises to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person, is called a contract of indemnity” The above definition restricts the scope of the contract of indemnity as it only covers the losses caused by the conduct of the promisor himself or by the conduct of any other person. However, it does not cover for losses caused due to accidents.
It is because of this fact that the English definition which states that, “a promise to save another harmless from loss caused as a result of a transaction entered into at the instance of the promisor.” This definition is followed as it provides to make good the loss arising from any cause whatsoever e.g. fire, perils of sea, accidents,. etc.
It can be said that a contract of indemnity is a contingent contract as contingent means conditional, something which is dependent or subject to the happening a particular event. As from the definition it is clear that it refers to contract by which one party promises to save the other party from loss caused to him by the conduct of the promisor himself or any other person. As, the contract is based on the happening of a particular conduct which may be expressed or implied thus it can be said that a contract of indemnity is a contingent contract. That is it provides for a back up in case of happening of a particular event.