of renovation as this was necessary to the contract, but not the medical expenses as the contract did not require them to hire a manager. Were the sellers at fault, damages would clearly be available. The distinction between indemnity and damages is subtle and may be differentiated by considering the roots of the law of obligations: how can money be paid if the defendant is not at fault? The contract before rescission is voidable but not void, so, for a period of time, there is a legal contract. During that time, both parties have legal obligation. If the contract is to be voided ab initio the obligations performed must also be compensated. Therefore, the costs of indemnity arise from the (transient and performed) obligations of the claimant rather than a breach of obligation by the defendant. Distinction from guarantees An indemnity is distinct from a guarantee, which is the promise of a third party to honor the obligation of a party to a contract should that party be unable or unwilling to do so (usually a guarantee is limited to an obligation to pay a debt). This distinction between indemnity and guarantee was discussed as early as the eighteenth century in Birkmyr v Darnell. In that case, concerned with a guarantee of payment for goods rather than payment of rent, the presiding judge explained that a guarantee effectively says "Let him have the goods; if he does not pay you, I will." Distinction from warranties An indemnity is distinct from a warranty in that: An indemnity guarantees compensation equal to the amount of loss subject to the indemnity, while a warranty only guarantees compensation for the reduction in value of the acquired asset due to the warranted fact being untrue (and the beneficiary must prove such diminution in value). Warranties require the beneficiary to mitigate their losses, while indemnities do not. Warranties do not cover problems known to the beneficiary at the time the warranty is given, while indemnities do. United States contracts Many private contracts and terms of service in the United States require one party (indemnitor, typically a customer) to pay (indemnify) the other side's costs for legal claims arising from the relationship. They are particularly common in online services. The US government publishes special Terms of Service, which it has negotiated with many companies, to exclude indemnification for official US government work. US law "is violated by