Contract of indemnity is derived from English law it includes a promise of indemnity against the loss arising from any cause whatsoever the loss caused due to fire or by any accident in or every contract of insurance other than the life insurance is a contract of indemnity as putting English law indemnity means a promise to save a person harmless from the consequence of a particular act the promise may be expressed or implied depending on the circumstances of the case

In the case of Adamson vs Jarvis 1872

 The plaintiff an auctioneer sold certain cattle on the instruction of the defendant and subsequently it was turned out that the livestock did not belong to the defendant but to another person who made the auctioneer liable and the auctioneer, in turn, sued the defendant for indemnity of the loss he was suffered by acting on the defendant's direction in this case the plaintiffs have acted on the request of the defendant and was entitled to assume that the defendant was the rightful owner of this cattle.

The contract of indemnity is defined under Section 124 of the Contract Act

A contract of indemnity by in which one party promises to save the other party from loss caused to him by the conduct of the promisor himself or by the conduct of any other person is known as a contract of indemnity

The scope of India contract Act by which the very process and the definition is provided and is restricted to cases where there is a promisor to indemnify against loss caused 

• By the promised himself
• By any other person
• It generally includes any loss which has been caused by the human agency under the contract of indemnity

Section 125 of the Indian Contract Act Lays down the right of indemnity holder when secured the promise in a contract of indemnity acting within the scope of his authority is entitled to recover from the promisor

• All the damage which he may be compelled to pay in any suit in respect of any matter to which the promise of indemnity applies
•  All the cost which he may be compelled to pay in such suit if in bringing or defending it he did not contravene the order and acted as it would have been prudent for him to act in the absence of any contract of indemnity or if the promissory is authorised him to bring or Defend the suit
•  All sums which he may have paid under the terms of the compromise of any such suit if the compromise was not contrary to the order 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 promissory has authorised him to compel the suit