Definitions for "Hold-Harmless Clause"
A provision added to legislation to ensure that recipients of federal funds do not receive less in a future year than they did in the current year if a new formula for allocating funds authorized in the legislation would result in a reduction to the recipients. This clause has been used most frequently to soften the impact of sudden reductions in federal grants.
Clause written into a contract by which one party agrees to release another party from all legal liability, such as a retailer who agrees to release the manufacturer from legal liability if the product injures someone.
A hold-harmless clause (also known as an indemnification clause) attempts to shift liability from one party to another (e.g., from an HMO to an employed physician). Courts may modify or refuse to uphold such agreements if they are deemed harmful to the public or the parties are perceived to have unequal bargaining power.