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Today, we will discuss indemnity contracts, which are important contracts that involve compensating for any losses that may occur. Indemnity means making a loss good, so one party promises to take care of any potential losses. For example, if person A is purchasing goods from person B, person C may provide indemnity, ensuring that if person A fails to pay, person C will compensate for the loss. Indemnity contracts can be seen as a way to convert potential losses into non-loss situations.
