Legal Definitions - save-harmless clause

A save-harmless clause, often used interchangeably with an indemnity clause, is a contractual provision where one party agrees to protect another party from potential financial losses, damages, or legal liabilities that might arise from specific actions, events, or omissions. Essentially, it means one party promises to "hold the other harmless" from certain claims, costs, or responsibilities.

Here are some examples illustrating how a save-harmless clause works:

• Software Development Agreement:

  Imagine a small business hires a freelance software developer to create a custom mobile application. The contract includes a save-harmless clause stating that the developer will protect the business from any legal claims or expenses if the application infringes on a third party's intellectual property rights (e.g., using copyrighted code or design elements without permission) due to the developer's work. If a third party sues the business for infringement, the developer would be obligated to cover the business's legal defense costs and any damages awarded.

• Event Venue Rental:

  Consider a local charity organizing a fundraising gala and renting a ballroom from a hotel. The rental agreement contains a save-harmless clause. This clause might stipulate that the charity agrees to protect the hotel from any liability for injuries sustained by gala attendees or for property damage caused by the charity's guests or vendors during the event, unless the hotel's own gross negligence was solely responsible. If a guest slips and falls, and attempts to sue the hotel, the charity would be responsible for defending the hotel and covering any resulting settlement or judgment.

• Construction Project Contract:

  A homeowner hires a general contractor to build an extension on their house. The construction contract includes a save-harmless clause. This clause might specify that the contractor will protect the homeowner from any claims arising from accidents involving the contractor's employees or subcontractors on the property (e.g., a worker falling from scaffolding) or from faulty workmanship that causes damage to the existing structure or an adjacent property. If a subcontractor's employee is injured on the job site and sues the homeowner, the contractor would be responsible for defending the homeowner and covering any related costs.