Principal's duty to indemnify protects agents against liabilities, costs and expenses for lawful acts within conferred authority. The employer of an agent must indemnify the agent for all consequences of lawful acts done in exercise of conferred authority, including liability for damages, costs and expenses incurred when the principal fails to provide agreed performance, repudiates contracts, or authorizes defence, as illustrated by cases where agents defending or compelled to pay under contracts made for the principal are reimbursed by the principal.