What is a contractual arrangement where one party assumes the liability of a situation?

A hold harmless agreement is a contractual arrangement where one party agrees to assume the liability or legal responsibility for certain risks associated with a situation, protecting another party from potential legal action or costs arising from those risks. In essence, the party who holds harmless takes on the risks and liabilities that may be incurred, which can include injuries, damages, or losses that could occur in the context of the agreement.

This type of agreement is commonly used in various industries, such as construction and event planning, where one party may need to protect themselves from claims due to the actions or negligence of another party. By entering into a hold harmless agreement, the obligated party agrees to "hold harmless" the other party from any claims or damages, thereby clarifying the distribution of liability.

The other options do not align with the same concept. A liability waiver typically protects the provider from claims by requiring individuals to relinquish their right to sue in exchange for participation in an activity. An indemnity agreement, while related, focuses more on compensating for losses or damages already incurred rather than assuming future liability. An agency agreement establishes a relationship where one party acts on behalf of another but does not inherently address liability assumptions in the same way as a hold harmless agreement does. Each of these agreements