What term describes a contract provision in which one party agrees to assume liability for damages or injuries caused by another party?

• A. Waiver
• B. Release
• C. Hold Harmless/Indemnification Agreement
• D. Covenant Not to Sue

Answer: (C)

The concept tested is a hold harmless/indemnification clause, which is a contract provision where one party agrees to assume liability for damages or injuries caused by the other party. This means the indemnitor will cover losses, defend, and reimburse the indemnitee for claims arising from the acts of the other party, shifting the risk from the party protected to the party taking on the liability. This is why it fits best: it explicitly creates a promise to bear the liability and related costs for injuries or damages caused by the other party.

Compared to a waiver, which simply relinquishes the right to sue, a waiver does not obligate one party to pay or defend for damages caused by the other. A release shuts down claims, again not transferring ongoing liability or responsibility for costs. A covenant not to sue only prevents future lawsuits and does not automatically assign liability or defense costs to another party.