INDEMNITY
A common western legal principle is that the party causing damage shall compensate the other party for the caused damage. According to the Tort Liability Act damage alone does not lead into liability for the damage. Liability is established if the damage was caused intentionally or out of negligence.
Liability for damage can also be based on a contractual agreement. It is very common that especially in business contracts the liability for damage is defined in connection with breach of contract. In addition, some laws involving commercial trade contracts have stipulations regarding liabilities.
The starting point in Finland in the Tort Liability Act is that indemnity is provided to cover physical injuries and damage to goods and it covers costs directly relating to these. Indemnity for physical injury includes indemnity for loss of income. In addition, on special grounds, pain and financial loss can be compensated.
