Vatsal Tanna’s Post

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Sr. Contract Engineer at Patel Infrastructure Limited

Here's a simple analogy to understand the concept of Obligations, Liability, Risk, and Indemnity in a project. Scenario: I take my toddler to a restaurant and order tea. Obligations: I am obligated to pay for my order. Liability: If I accidentally break a teacup, I'll be liable to pay for the broken cup. Indemnity: If my toddler accidentally breaks a teacup, he won't have to pay a single penny. I'll pay for the entire cup on my toddler's behalf. In other words, I have indemnified my toddler. Risk: There is a risk that I forgot my wallet at home. In such a situation, I'll be unable to fulfill my obligation of making payment for the tea that I had ordered. I hope that this analogy clears up these terms.

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