The purpose of the indemnification clause is to define which party to the contract and in what way will be responsible for particular types of breaches of the contract or for events that may occur during its application.
The greater the value of the contract, the more important is the role of this clause, because a skillfully and clearly structured division of responsibility for individual events can save a lot of time and resources, which, in case of its absence, would have to be spent on determining the responsibility for the occurrence of a given incident.
Indemnification clauses may extend or narrow the liability to applicable laws. They are often used when one of the parties intends to use the services of some third party during performance of the contract.
Such clauses undoubtedly have a positive effect on the business world, as they accelerate and improve the performance of contracts.