Indemnity forms: What you need to know

Have you ever signed an indemnity form? Did you ever think that giving that company complete indemnity seemed a bit unfair? Does the whole idea of indemnity confuse you a bit? Or are you a company who wants to use indemnity forms, but is not sure what exactly you can and can’t do? Well, in this blog post, we are going to look at some basics about indemnity forms (or clauses). Hopefully this will help you understand the topic a bit better!

indemnity forms

Indemnity clause, what is it?

An indemnity clause is a clause in a contract that minimises or exempts one party’s liability to the other party where that liability would normally have to be accepted by the first party. It makes sense, then, that lawyers will include such a clause in their client’s contract to ensure that their client is as protected as possible. Indeed, all adventure parks, hotels, guesthouses and B & Bs have a clause like this incorporated into their registration forms.

Sometimes, however, these clauses are concealed within the contract, in a manner that the customer does not become aware of the clause. Sometimes these clauses are worded in a manner that operates unfairly on the customer agreeing to give the indemnity.

What the law says

The High Court has recently emphasized two important legal principles to keep in mind when dealing with indemnity clauses. The first is that a contractual term cannot be enforced if its enforcement would be unjust or unfair. In figuring out whether this is the case, one can consider whether the term conforms to the ideas of fairness, justice and reasonableness. The second is that the courts cannot let blind reliance on the principle of freedom of contract override the need to ensure that contracting parties must have access to courts if they need that access.

The Constitutional Court held similarly that whether a clause is enforceable would always depend on what is fair and reasonable in the circumstances. It found that indemnity clauses that exclude liability for bodily harm deny the claimant their constitutional right of access to the courts for redress. Such clauses, even when entered into freely, voluntarily and by consenting parties would be unconstitutional and therefore unenforceable.

When considering indemnity clauses, it is also important to look at the Consumer Protection Act. This Act states that a supplier must not require a consumer to waive any liability of the supplier, on terms that are unfair, unreasonable or unjust. Simply put, if the indemnity clause is unfair, unreasonable or unjust, it will not be enforceable.

Indemnity forms: The take-home message

For guests and visitors of  adventure parks, hotels, guesthouses, B & Bs and other public places: If you have suffered any injury or loss, because of the negligence of such places, consult an attorney on claiming damages. You have rights, regardless of what indemnity form you might have signed.

For owners and insurers of adventure parks, hotels, guesthouses, B & Bs and other public places: Your level of risk has increased. Consult an attorney on how to construct your indemnity clause.

If you need help in this area, please do not hesitate to contact us at info@gunstons.com.

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