The free hold harmless agreement, also known as hold harmless provision, under the legal contract says that one organization or individual is not responsible for the damages, losses or injuries etc faced or done by the other party. This document save both parties from any claim, about transection or activity that might arise during or after a task is completed by them. Both entities agree upon taking the responsibility of any risk faced by them during business, even death.
It is basically of two types: Unilateral and reciprocal. In case of unilateral, the one party declares the other of being responsible for experiencing any damage or harm. While in case of reciprocal type of free hold harmless agreement, both parties mutually agree upon declaring each other harmless of any suffering.
It is generally implemented in situations when such as one party is using the property of other, one is involved in the activities of other or may be one member is provided with some kind of services by the other part. This agreement is not valid in every type of situation especially when one party is involved in illegal or fraudulent activities. All the information, terms and conditions related to both parties are included in it after their careful consideration. Such agreements does not necessarily require any witness. However, there could be a person held witness in the agreement depending upon the desire of the parties.
It must be kept in mind that this agreement does not free the parties from their standard and legal responsibilities such as ensuring safe and secure environment of workplace, following the proper rules and regulations etc. However, in case of negligence, the free hold harmless agreement does not provide any compensation or protection. For instance, a sports club hold free harmless agreement statements in their memberships to avoid any malicious claim of the members about any harm done to themselves due to their own fault. People, sometimes also sue businesses for losses when the owners are not reasonably responsible for them and get heavy settlement in return which completely destroys the business. In such cases, this agreement hold huge importance to prevent any destructive claim against them. However, in case of negligence on part of responsible party, for example; if the business authorities have the knowledge about some faulty or broken machine and still they don’t bother to repair it are such cases when there is no way to mitigate the liabilities on part of that party.
In essence, a free hold harmless agreement could be easily exercised in our day to day business while providing protection against unjust litigation. Once this clause is prepared by the business organization, it is needed to be signed only by the other party and it became legally bound to its terms and conditions. The business owner become fearless and relaxed.
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