Kinds of contract of indemnity

A contract of indemnity can be classified into two categories on the basis of expression of the parties at time of its formulation as express and implied.

i. Express contract of indemnity: When the parties to contract expressly enter into a contract of indemnity. A party expressly promises to indemnify the other party from loss.

Example: A promise to compensate B if B’s goods are damaged due to the conduct of C.

ii. Implied contract of indemnity: When the contract of indemnity deemed to have concluded by the conduct of the parties or from the circumstances of the particular case, it is known as implied contract of indemnity.

Example: A hires a motorcycle from the B’s shop to use for one day. The motorcycle gets damaged due to the accident. Here, A has to compensate for damage to B, although he has not agreed expressly to do so.