Chapter 30

COL12010618GCA BUSINESS STRUCTURE &FUNCTION CH.30INDEMNITY 1DIVISION 2 COMMERCI AL &BUSINESS OBLIGATIONS PART 1 THIRD-PARTY OBLIGA TIONS Chapter 30. Indemnity . Chapter 31. Guaranty . Chapter 32. Suretyship. NOTE: Title I, Part 4, Div . 3 of the Civil Code, Sale, being ''1721 -1800, was repealed by P .L. 13 -150:2 and replaced by appropriate parts of Title 13 of this Code (UCC). Title II of Part 4, Div. 3 of the Civil Code, Exchange, being ''1801.101 -1808.103, has been placed in Title 13 of this Code. CHAPTER 30 INDEMNITY § 30101. What is Indemnity . § 30102. Wrongful Act V oid. § 30103. Past Act V alid. § 30104. Indemnity Covers Agent's Acts. § 30105. Indemnity to Several. § 30106. Persons Indemnifying Generally . § 30107. General Rules. § 30108. When Person Indemnifying is a Surety . § 30109. Bail. § 30110. How Regulated. § 30101. What is Indemnity. Indemnity is a contract by one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person. SOURCE: CC § 2772. § 30102. Wrongful Act V oid. COL12010618GCA BUSINESS STRUCTURE &FUNCTION CH.30INDEMNITY 2An agreement to i ndemni fya person against an act thereafter to be done, is void,

person. SOURCE: CC § 2772. § 30102. Wrongful Act V oid. COL12010618GCA BUSINESS STRUCTURE &FUNCTION CH.30INDEMNITY 2An agreement to i ndemni fya person against an act thereafter to be done, is void, if the act be known by such person at the time of doing it to be unlawful. SOURCE: CC § 2773. § 30103. Past Act V alid. An agreement to indemnify a person against an act already done, is valid, even though the act was known to be wrongful, unless it was a felony . SOURCE: CC § 2774. § 30104. Indemnity Covers Agent's Acts. An agreement to indemnify against the acts of a certain person, applies not only to his acts, but also to those of his agents. SOURCE: CC § 2775. § 30105. Indemnity to Several. An agreement to indemnify several persons applies to each, unless a contrary intention appears. SOURCE: CC § 2776. § 30106. Persons Indemnifying Generally. One who indemnifies another against an act to be done by the latter is liable jointly with the person indemnified, and separately , to every person injured by such act. SOURCE: CC § 2777. § 30107. General Rules. In the interpretation of a contract of indemnity , the following rules are to be applied, unless a contrary intention appears: 1.

erson injured by such act. SOURCE: CC § 2777. § 30107. General Rules. In the interpretation of a contract of indemnity , the following rules are to be applied, unless a contrary intention appears: 1. Upon an indemnity against liability , expressly , or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable; 2. Upon an indemnity against claims, or demands, or damage s, or costs, expressly , or in other equivalent terms, the person indem nified is not entitled to recover without payment thereof; 3. An indemnity against claims, or de mands, or liability , expressly , or in other equivalent terms, embraces the costs of defe nse COL12010618GCA BUSINESS STRUCTURE &FUNCTION CH.30INDEMNITY 3against such claims, demands, or liability incurred in good faith, and in the exercise of a reasonable discretion; 4. The person indemnifying is bound, on request of the person indemnified, to defend actions or pro ceedings brought against the latter in respect to the matters embraced by the indemnity , but the person indemnified has the right to conduct such defenses, if he chooses to do so; 5.

actions or pro ceedings brought against the latter in respect to the matters embraced by the indemnity , but the person indemnified has the right to conduct such defenses, if he chooses to do so; 5. If, after request, the person indemni fying neglects to defend the person indemni fied, a recovery against the latter suffered by him in good faith, is conclusive in his favor against the former; 6. If the person indemnifying, whether he is a principal or a sure ty in the agreement, has not reason able notice of the action or proceeding against the person indemnifi ed, or is not allowed to control its defense, judgment against the latter is only presump tive evi dence against the former; 7. Astipulation that a judgment against the person indemnified shall be conclusive upon the person indemnifying, is inapplicable if he had a good defense upon the merits, which by want of ordinary care he failed to establish in the action. SOURCE: CC § 2778. § 30108. When Person Indemnifying is a Sure ty. Where one, at the request of another, engages to answer in damages, whether liquidat ed or unliquidated, for any violation of duty on the part of the latter, he is entitled to be reimbursed in the

y. Where one, at the request of another, engages to answer in damages, whether liquidat ed or unliquidated, for any violation of duty on the part of the latter, he is entitled to be reimbursed in the same manner as a surety , for whatev er he may pay . SOURCE: CC § 2779. § 30109. Bail. Upon those contracts of indem nity which are t aken in legal proceedings as the security for perfor mance of an obligation imposed or declared by the tribu nals, and known as undertakings or recognizances, the sureties are called bail. SOURCE: CC § 2780. § 30110. How Regulated. COL12010618GCA BUSINESS STRUCTURE &FUNCTION CH.30INDEMNITY 4The obligations of ba il are governed by the laws specially applica ble thereto. SOURCE: CC § 2781. NOTE: No 1970 Civil Code '§ 2782 -2786 existed. ----------COL12010618GCA BUSINESS STRUCTURE &FUNCTION CH.30INDEMNITY