The promisor shall be liable in any event whether or not the promisee makes default.
The promisee is entitled to recover damages that he was compelled to pay in a suit for which he was being indemnified-
- All damages which he may be compelled to pay in any suit in respect of any matter to which the promise to indemnify applies
- All costs which he may be compelled to pay in any suit if, in bringing or defending it, he did not contravene the orders of the promisor and acted as it would have been prudent for him to act in the absence of any contact of indemnity, or if the promisor authorized him to bring or defend the suit.
A prime example would be the case of Adamson v. Jarvis where the court held that since the plaintiff acted according to the defendant’s instructions and incurred a loss because of the same, the plaintiff was entitled to compensation.
- All sums which he may have paid under the terms of any compromise of any such suit, if the compromise was not contrary to the orders of the promisor and was one which it would have been prudent for the promisee to make in the absence of any contract of indemnity, or if the promisor authorized him to compromise the suit.