Elf accepted that the ROV was an object of a corporation, but argued that the company`s obligation to compensate the contractor for damages to a company`s property did not apply if the act justifying the claim itself constituted a violation of the contractual obligation of the contractor to deal with the company`s cause. The Court found that the distribution of risks in contractual compensation was clear. The contractor was required to take care of every object of the company entrusted to him, but the financial consequences of the property damage caused by the lack of care were nevertheless dealt with under the “Knock for Knock” compensation scheme. In the absence of such compensation, the rights and obligations of the parties are determined by the contractual conditions or general principles of the unlawful act (negligence) in force in the country where the damage occurs. Therefore, compensation that is expressed independently of negligence has the effect of reversing the legal situation in force in most legal systems, which is the responsibility of the person responsible for the injury or injury. Under a “Knock for Knock” system, each party is required to satisfy all claims arising from damage to its property and personnel, even if the damage is caused by the fault of others. “Knock for knock” is a joint contractual agreement in the oil and gas industry.  The operator of an oil and gas property needs the help and know-how of many types of contractors, including drilling companies, drilling service providers, facility builders, equipment suppliers and caterers. As a general rule, the operator will use these services as part of a master service contract that defines the essential general conditions under which the work is performed.
One of these conditions is the distribution of the risk of loss between people and property. In general, a knock-for-knock agreement means that any party working on an oil and gas site – the operator and any contractor – agrees to protect and compensate all other parties against violations by employees and agents of that party as well as the destruction or damage of that party`s property. This allowance is not based on the fault or guilt of the individual whose staff was injured or whose property was damaged. The objective is to effectively defend and pay a debt through the co-responsibility of a single party responsible for the loss. In Caledonia`s case, the contract provided for an exclusion of consecutive damages, but no compensation, and the extent to which compensation for consecutive damages reduces the obligations arising from other “Knock for Knock” compensations is potentially very significant. If personal and personal injury recovery benefits are not sufficient to cover the consequential damages, both the company and the contractor are potentially exposed to debts to members of the group for whom they cannot be contractually appealed under the compensation system. Often, additional formulations are added to change the knocking effect to hit. A knock-for-knock clause is a mutual agreement on the sharing of liability for certain losses (usually death or violation of personnel and property damage) between the contracting parties, supported by mutual compensation. The other four signatories have been informed and any accidents that occurred after that date are no longer subject to the South African “Knock for Knock” agreement and normal common law remedies apply. The tendency to treat benefits as “hidden” at the back of the contract is still present, and a subject that must be widely accepted among insurance advisors.