S1215-2013 Actions

• Jan 9, 2013: REFERRED TO JUDICIARY

S1215-2013 Memo

BILL NUMBER:S1215

TITLE OF BILL:
An act
to amend the general obligations law, in relation to
indemnification agreements relating to construction projects

PURPOSE OR GENERAL IDEA OF BILL:
To forbid agreements in construction contracts indemnifying a promisee
for damages caused by third parties.

SUMMARY OF SPECIFIC PROVISIONS:

Section 5-322.1 of the General Obligations Law is amended to forbid
not only agreements whereby a promisor indemnifies a promisee for
damages caused by the promisee's negligence, but also to agreements
whereby a promisor indemnifies a promisee for damages caused by third
party negligence.

JUSTIFICATION:

Section 5-322.1 of the General Obligations Law, as amended in
1981,prohibits clauses in a construction contract between an owner
and a contractor, or between a contractor and a subcontractor,
purporting to indemnify the owner or contractor against liability for
personal injury or property damage arising from the negligence of
such owner or contractor.

However, under current law, contractors or subcontractors can be
required to indemnify an owner or contractor for damages due to
injuries caused by the negligence of third parties. Since a
subcontractor often has no control over other contractors and
subcontractors on the job site, it is grossly unfair to place the
burden on a subcontractor by requiring it to indemnify the contractor
for negligence of those third parties. The subcontractor should be
responsible for its own negligence but not for the negligence of
unrelated third parties.

PRIOR LEGISLATIVE HISTORY:
2011-12: S.3183/A.5026 - Died in Judiciary; 2009-2011 S.8011A.2372
Died in Judiciary; 2007-08: Referred to Judiciary, 2005-06: Referred
to Judiciary, 2003-04: Held for consideration in Judiciary, 2002:
Referred to Judiciary, 2001: Referred to Judiciary, 2000: Referred to
Judiciary; reported with amendments, 1999: Referred to Judiciary,
1998: Referred to Judiciary

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:
This act shall take effect thirty days after it shall become law.

S1215-2013 Text

 S T A T E   O F   N E W   Y O R K
 
 S. 1215                                                   A. 527
 2013-2014 Regular Sessions
 SENATE - ASSEMBLY
 (PREFILED)
 January 9, 2013
 
 IN  SENATE  --  Introduced by Sen. DeFRANCISCO -- read twice and ordered
 printed, and when printed to be committed to the Committee on  Judici
 ary
 IN ASSEMBLY -- Introduced by M. of A. CUSICK, ROBINSON, ABINANTI -- read
 once and referred to the Committee on Judiciary
 

AN ACT to amend the general obligations law, in relation to indemnifica
 tion agreements relating to construction projects
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. Subdivision 1 of section 5-322.1 of the general obligations
 law, as amended by chapter 67 of the laws of 1993, is amended to read as
 follows:

 1.  A  covenant,  promise,  agreement  or  understanding  in,  or   in
 connection with or collateral to a contract or agreement relative to the
 construction,  alteration,  repair  or maintenance of a building, struc
 ture, appurtenances and  appliances  including  moving,  demolition  and
 excavating connected therewith, purporting to indemnify or hold harmless
 the  promisee  against liability for damage arising out of bodily injury
 to persons or damage to  property  NOT  contributed  to,  caused  by  or
 resulting  from  the  negligence OR OTHER CULPABLE ACT of the [promisee,
 his] PROMISOR, ITS agents [or], employees, SUBCONTRACTORS  or  [indemni-
 tee, whether such negligence be in whole or in part,] VENDORS is against
 public  policy and is void and unenforceable; provided that this section
 shall not affect  the  validity  of  any  insurance  contract,  workers'
 compensation agreement or other agreement issued by an admitted insurer.
 [This  subdivision  shall not preclude a promisee requiring indemnifica-
 tion for damages arising out of bodily injury to persons  or  damage  to
 property  caused  by  or  resulting from the negligence of a party other
 than the promisee, whether or not the promisor is partially negligent.]
 

S 2. This act shall take effect on the thirtieth day  after  it  shall
 have become a law.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD04998-01-3

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