You can also include a claim language in a contract. For example, a typical indemnification clause in a contract for a construction project could state that Party A will perform the declared work at its own risk and would indemnify Party A, Part B for all losses, damages, expenses and liability for the work performed on that contract. In other words, Party A agrees that even if Party B is held liable for an act, Party B is not liable to indemnify Party A for liability for that act. A shipment may arrive at a customer`s site, but there is no bill of lading available for the deductible with the list of items in the shipment. The customer may be reluctant to accept the shipment because they have no way of knowing if it is complete. A letter of compensation would assure the client that they would not suffer a loss if something was missing. In another common example, you may agree to use a credit card to purchase services from someone else. (This can happen if you buy airline tickets for someone.) The credit card company may dispute the transaction because they don`t want liability if you refuse to pay. You may need to write a letter of indemnification to the credit card company to indicate that you agree to the payment of the fee. You may be wondering why you need to write an actual letter instead of just talking to the person about the problem. A letter of indemnification is a contract and it must be written if you want to take it to court to get the other party to keep their promises. Talking only about the subject, shaking hands and making verbal promises will not be enough if the other party decides to take you to court. The concept of compensation is to keep someone unharmed and not let that person or business suffer a loss.
To keep someone unharmed is to compensate them for the losses of a particular incident. If a letter of compensation relates to a business matter, make sure that your company – not you personally – is mentioned in the letter. Sign with your company title (for example. B as “Carla Carerra, President”) to make it clear that the company is a party to the agreement. In another more personal example, your neighbor might want to borrow your truck to make a move. You fear that the truck will be damaged or that the moved objects will be damaged and that you may be responsible. You could ask your neighbour to sign a letter of compensation saying that you are held unharmed and that the neighbour will pay for all damage if the truck or items are damaged. (Yes, there might be insurance in this example, but you may not want to have to assert a right to insurance.) Here is an example of a certificate of compensation (similar to an act of compensation): This document of the Federal Council for Arts and Letters and the owners of certain works of art (listed) undertake to compensate an exhibitor for the loss or damage of objects during the exhibition. There is also a certain limit on the amount of compensation and a date of entry into force and termination….