indemnity
noun · Freistellung
Freistellung, the claim to be kept clear of a liability before it is paid. Entschädigung, the reflex rendering, quietly moves the trigger from exposure to loss, the client is reimbursed after the damage instead of shielded from the claim.
Which translation, when
Why
An English indemnity is a primary promise, the promisor keeps the promisee out of a defined loss or claim, no breach needed, and the commercial point is timing, the promisee wants the claim handled before he pays. German law has the matching figure in the Freistellungsanspruch, the claim to be freed from a liability, § 257 BGB states it for incurred obligations, and a party released in this way never has to fund the claim himself. Entschädigung and Schadensersatz sit on the other side of the event, money for a loss already suffered, and Schadensersatz drags the whole German damages regime into the clause, fault under § 280 Abs. 1 BGB, causation, the measure of §§ 249 ff. BGB. So the choice of word sets the trigger: Freistellung binds at exposure, Entschädigung only at loss, and an indemnity translated as Entschädigung has been demoted from shield to refund.
Typical mistakes
- Entschädigung is the reflex and the weakest choice, it describes compensation after the event, an indemnity is meant to bite while the third-party claim is still live.
- Schadensersatz brings fault into play, § 280 Abs. 1 BGB, where the English text framed a primary, no-fault payment promise.
- Indemnify and hold harmless needs no German double, freistellen carries both halves, the literal entschädigen und schadlos halten reads as translation residue.
What matters
Tax indemnities in a share purchase agreement show the stakes: the buyer wants the seller to deal with the assessment when it arrives, not to refund him years later. Freistellung gives him exactly that claim, Entschädigung leaves him paying the tax office first and chasing the seller afterwards, a different risk on the same page.
What the machine misses
Run an indemnity through machine translation and Entschädigung comes back, sometimes Schadensersatz, both words for money after a loss. The clause was drafted to keep the client out of the firing line, the German version now merely promises to repay him afterwards, and the right to hand the claim over before paying, the point of an indemnity, has silently dropped out.
Examples
| to indemnify a party against all claims | eine Partei von allen Ansprüchen freistellen |
| indemnify and hold harmless | freistellen und schadlos halten |
| an indemnity for third-party claims | eine Freistellung von Ansprüchen Dritter |
| a tax indemnity | eine Steuerfreistellung |