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What is a "hold harmless" agreement?

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A "hold harmless" agreement, or a hold harmless provision, is a legal contract that states an individual, group or company is not liable for injuries or damages that happen to another individual, according to Investopedia. This type of agreement limits the legal liability or one or both parties, and the agreement must be in writing, notes Rocket Lawyer.

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Investopedia reveals that an individual signs a hold harmless agreement when such a person undertakes risky behavior for which the entity does not want to be liable. For example, members of a sports club sign a hold harmless agreement to prevent a lawsuit against the club if tennis players are injured on a tennis court. In this case, the sports club's members assume all of the risks associated with injury or death that come from a physical activity such as tennis.

Rocket Lawyer explains that companies need hold harmless agreements for three main reasons: protection from damages caused by another party on a company's property, protection from liability if a third party is harmed when another party performs services and protection from lawsuits due to the company's own actions. One example occurs if a courier trips on construction debris on a homeowner's property and gets hurt. The homeowner signed a hold harmless agreement before the remodeling company began work to prevent the courier from suing the homeowner for damages. Instead, the construction company may be liable for the courier's injuries because of the hold harmless agreement.

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