ABSTRACT
An indemnity clause can be defined as an express contractual obligation to compensate another party by making a money payment for some defined loss or damage. Whether a clause amounts to an indemnity clause is a matter of substance and effect, not a matter of the clause's heading or description. Indemnity clauses are subject to the contra proferentem rule. The courts will endeavour to interpret indemnity clauses in such a way as to be consistent with the main purpose or object sought by the contract. Under an indemnity clause, however, such liability is typically the responsibility of the Company and the Contractor would normally be entitled to an indemnity in respect of its own exposure to such liability. The risk allocation pursuant to the indemnity clauses in offshore contracts is typically based on a no fault regime where loss is allocated to the party that suffers the loss, rather than the party that causes the loss.
