Compounding factor and Counter-indemnity: Difference between pages
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A counter-indemnity is an obligation to make a reimbursement in relation to a primary indemnity, guarantee, bond or any similar arrangment. | |||
For example, we may be a corporate supplier in a commercial contract. | |||
As part of the contractual arrangements, our bank may issue a performance bond to our customer. | |||
This gives rise to a contingent liability for our bank. | |||
The bank will require a counter-indemnity from ourselves, in favour of the bank. | |||
If the performance bond is called, we must indemnify the bank under the counter-indemnity. | |||
== See also == | == See also == | ||
* [[ | * [[Bond]] | ||
* [[ | * [[Contingent liabilities]] | ||
* [[ | * [[Guarantee]] | ||
* [[ | * [[Indemnity]] | ||
* [[Indemnity clause]] | |||
[[ | * [[Multilateral netting]] | ||
[[ | * [[Performance bond]] | ||
[[ | |||
Revision as of 18:58, 22 June 2017
A counter-indemnity is an obligation to make a reimbursement in relation to a primary indemnity, guarantee, bond or any similar arrangment.
For example, we may be a corporate supplier in a commercial contract.
As part of the contractual arrangements, our bank may issue a performance bond to our customer.
This gives rise to a contingent liability for our bank.
The bank will require a counter-indemnity from ourselves, in favour of the bank.
If the performance bond is called, we must indemnify the bank under the counter-indemnity.
