Hold harmless: Overview, definition and example
What does hold harmless mean?
Hold harmless is a legal term used in contracts where one party agrees not to hold the other responsible for certain damages, losses, or claims. Essentially, it’s a promise to protect the other party from legal or financial liability in specific situations.
For example, a contractor might agree to hold a client harmless if someone is injured on the job site due to the contractor’s actions.
Why is hold harmless important?
Hold harmless provisions are important because they clearly outline who is responsible if something goes wrong. For the party being protected, it reduces legal risks and provides a layer of security. For the other party, it sets limits on what they can be held liable for, which helps avoid disputes.
In business, hold harmless clauses are common in contracts involving services, partnerships, or events, ensuring that risks are allocated fairly between the parties.
Understanding hold harmless through an example
Imagine a company hires a catering service for a corporate event. The catering contract includes a hold harmless clause where the catering company agrees to protect the client from claims if a guest gets food poisoning. If something goes wrong, the catering company—not the client—would handle any legal or financial fallout.
In another example, a supplier delivers goods to a retailer. The supplier’s contract has a hold harmless clause stating that the retailer won’t be held responsible for any damages caused during delivery, such as accidents involving the supplier’s trucks.
An example of a hold harmless clause
Here’s how a hold harmless clause might look in a contract:
“The Contractor agrees to hold harmless and indemnify the Client against any and all claims, liabilities, or damages arising from the Contractor’s performance of services under this Agreement, except in cases of gross negligence or willful misconduct by the Client.”
Conclusion
Hold harmless clauses protect one party from legal or financial responsibility for certain risks, ensuring that the other party takes on those obligations. They’re an important tool for managing risk and clarifying responsibilities in contracts.
By understanding hold harmless provisions, businesses can better protect themselves and ensure fair allocation of liability in agreements. It’s a practical way to reduce disputes and maintain smoother professional relationships.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.