A hold harmless agreement is a file kept prepared with due respect to all the legal considerations invoked by the court which assures that the person would be exempted from charges on grounds of irresponsibility in the presence of this tool. The charges may result from any kind of situation wherein the person may fall victim to a third party or to the forces of destiny due to which he might commit a mistake in his job. Even if this mistake amounts to loss or damage of the property of the employer, the employee will not be made liable for it. This provision guarantees a considerable level of protection to the person especially those working in risky jobs like courier services. The document makes it clear that the parties will not be held responsible for the losses emerging from a business deal until of course the deed is intentional. So, one business party can arrange this setting with another before entering into a business transaction.
The hold harmless agreement has to be constructed in specific terms since the use and placement of terminology forms the core of the utility of the document. Thus it must make the following issues lucidly clear to the parties:
1. The agreement legally allows the parties to overlook damages and expenses or claims based on these.
2. The agreement lays down an authorised solution of all disputes originating from a business transaction or programme.
3. The agreement clauses are not fixed and may vary according to the type of the jurisdiction under which it works.
The three main types of the agreement, simply categorised into the Broad Form, Intermediate Form and Limited Form, are recommended for use to defend the subcontractor’s laxity. The basic utilization of these forms is given in the following:
- It invokes a provision of concession on the compensation paid to the suffering party or may totally limit the payment in case of damages. This makes the adoption of an indemnity policy mandatory.
- This tool legally enforces the parties to insure the expenses incurred in course of the normal functioning of the business against sudden loss or in case of accidents. The framed party is then required to finance the loss through mobilization of its resources.
- The document holds true for only genuine cases and discards fraudulent cases completely. The law states that the party charged with treachery will not be protected by the agreement.