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In this case, the hotel is protected from losses, either by John directly or by a third party, the travel agency. The guarantee will only come into effect if the main obligation indicated by the compensation clause (in this case, john, who pays for the damage it causes) cannot be met. Compensation and guarantees are not “or” scenarios; instead, they offer protective layers. In the case of a contractor of a owners` association (HOA) where “the contractor compensates the association, defends it (by a lawyer reasonably acceptable by the association) and considers the association unscathed. [25] Companies and HOAs also use compensation to protect directors, as few would act as directors if their risks were not compensated. [26] Negotiations are important for both sides. “Almost all administrative contracts of the owners` association have a provision stipulating that the HOA compensates the administrator in certain circumstances… There are many ways to develop the compensation clause, and management and the AAS must consider what protects the best. [27] Compensation means security or protection from financial liability. It usually takes the form of a contractual agreement between the parties, in which one party agrees to pay for the losses or damages suffered by the other party.

Under corporate law, a compensation agreement is used to keep directors and executives of companies free from personal liability when the company is sued or damages. Depending on the drafting of the clause, compensation may cover: compensation serves as a transfer of risk between the parties and changes what they would otherwise be liable for or eligible under a normal right to damage. John books package holidays through a travel agency that includes a hotel stay. As part of his package vacation, there is a compensation clause that, if he is to harm John, damages his hotel room, he is required to compensate the hotel. There is also a guarantee in the contract signed by the travel agency that if John is unable to compensate the hotel for the damage, the travel agency promises to compensate the hotel in John`s name. However, the claim for damages is primarily used in the legal sense of the term as an exemption from liability for damages. The easiest way to imagine this example is in the police. The police will sometimes have to commit an illegal act to meet the demands of their work. However, police officers who rightly commit an illegal act are compensated against penalties because the illegal act serves the common good, such as the shooting of a fugitive criminal.

Posted on December 20th, 2020 | filed under Uncategorized |

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