Section 125 of the Indian Contract Act, 1872 – Rights of Indemnity Holder If a person has been promised protection against loss under a contract of indemnity under section 125 indian contract act . and a lawsuit is filed against him regarding that matter, he can recover the following amounts from the person who gave the indemnity (the promisor): Damages – Any compensation that he is legally required to pay in the suit. Legal Costs – The expenses of bringing or defending the suit, provided he acted reasonably and did not disobey the promisor's instructions (or was authorized by the promisor). Compromise/Settlement Amount – Any amount paid to settle the case, if the settlement was reasonable and not against the promisor's instructions (or was authorized by the promisor). Simple Illustration A promises B: "If anyone sues you regarding this property transaction, I will bear the loss." Later, C sues B. B pays: ₹50,000 as damages, ₹10,000 a...