A hold harmless clause is a provision commonly found in settlement agreements, particularly in personal injury cases. Essentially, this clause protects one party from legal action or liability for any future claims or damages related to the same incident that gave rise to the settlement agreement.
When parties enter into a settlement agreement, they are essentially agreeing to resolve their dispute outside of court. This means that the party bringing the claim (the plaintiff) agrees to accept a certain amount of money or other consideration from the party being sued (the defendant) in exchange for dropping the lawsuit. Once the settlement agreement is signed, both parties are bound by its terms and cannot pursue any further legal action related to the same incident.
The hold harmless clause is included to protect the defendant from being sued again in the future for the same incident. Essentially, the plaintiff agrees not to sue the defendant again for any additional damages related to the incident that gave rise to the claim. This can include future medical expenses, lost wages, or other costs.
However, it is important to note that a hold harmless clause does not completely absolve the defendant from all liability. If the defendant breaches the terms of the settlement agreement or engages in any misconduct that is not covered by the agreement, the plaintiff may still be able to pursue legal action.
It is also important to have a clear understanding of the language used in a hold harmless clause. Some agreements may use terms like “indemnify” or “exculpate,” which can have different legal meanings. Therefore, it is important to consult with an experienced attorney to ensure that the language used in a hold harmless clause is clear and unambiguous.
In summary, a hold harmless clause is a provision that protects one party from future legal action related to the same incident that gave rise to a settlement agreement. It is important to carefully review and negotiate the language of this clause to ensure that both parties are fully protected and understand their legal obligations.