Hold Harmless Agreements – What are they?

Hold Harmless Agreements – What are they?

A hold harmless agreement is a legally binding contract designed to release one or more parties from legal liability. In a standard agreement, one of the parties essentially agrees not to sue the other party for certain kinds of expenses, losses, or damages that may result from a particular transaction. Hold harmless agreements can be unilateral, or they can apply to both of the contracting parties.

Normally, a hold harmless agreement doesn’t apply if a party has acted intentionally or negligently. Actually many courts have found clauses that include intentional or negligent behaviour to be invalid and unenforceable. In addition, hold harmless arrangements are generally not upheld if a party has engaged in fraudulent or criminal behaviour.

A hold harmless agreement is commonly used in a variety of business transactions. For example, they are frequently used to limit liability between contractors and construction companies as well as among product manufacturers, retailers and distributors.