Makes indemnification agreements, relating to construction contracts void as against public policy.
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: 2007-08: A.9639 - Referred to Judiciary 2006-07: A.4742A - Referred to Judiciary 2005-06: A.2726 - Referred to Judiciary 2003-04: - Held for Consideration in Judiciary 2001-02: A.5410 - Referred to Judiciary 2000: A.4742 - Referred to Judiciary 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.
STATE OF NEW YORK ________________________________________________________________________ S. 3183 A. 5026 2011-2012 Regular Sessions S E N A T E - A S S E M B L Y February 10, 2011 ___________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 -- 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. LBD00504-01-1