A contract which one party undertakes to indemnify is a legal agreement that outlines the terms of liability for parties involved in a business relationship. In this type of contract, one party agrees to indemnify or compensate the other party for any losses, damages, or expenses that may occur as a result of the contract.

The main purpose of an indemnity clause in a contract is to shift the risk of loss from one party to the other. This ensures that both parties are protected in case of any unexpected events that may lead to financial loss. For example, in a construction contract, the contractor may agree to indemnify the owner against any claims or damages that may arise from injuries to workers or damage to property.

Indemnity clauses can be either broad or limited, depending on the specific needs and requirements of the parties involved. A broad indemnity clause typically provides full protection to the indemnified party, whereas a limited indemnity clause may exclude certain types of damages or limit the amount of compensation that can be awarded.

In addition, an indemnity clause may also include provisions for legal fees and expenses. This means that if the indemnified party is sued, the indemnifying party will be responsible for paying their legal fees and any other related expenses.

However, it`s important to note that indemnification clauses are not always enforceable. Courts may refuse to enforce an indemnification clause if it`s deemed to be against public policy, unreasonable, or if the indemnifying party acted negligently or intentionally caused the loss.

In conclusion, a contract which one party undertakes to indemnify is an important legal agreement that can help protect parties involved in a business relationship. It`s essential to carefully review and negotiate the terms of an indemnification clause to ensure that both parties are adequately protected.