Question 1

What is the difference between indemnity and hold harmless?

Accepted Answer

In Canadian law, an indemnity clause requires one party to compensate the other for losses, while a hold harmless clause prevents one party from holding the other responsible. They are often used together.

Question 2

Can indemnity clauses be voided in Canada?

Accepted Answer

Yes, Canadian courts may void indemnity clauses that are unconscionable or contrary to public policy. Clauses that attempt to indemnify against gross negligence or wilful misconduct may not be enforceable.

Question 3

Is there a limit to indemnification in Canada?

Accepted Answer

While there is no statutory cap, courts apply the principle of reasonable foreseeability. Parties often include a contractual cap on indemnification liability to manage risk.

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