Contractual Indemnity Provisions
There are times when a party in a construction dispute that has the most sway in contract negotiations pressures their opposing party to indemnify it if anything goes wrong in connection with the contract, including problems caused by the stronger party’s own negligence. As Orlando construction lawyers, we know that indemnity is a risk shifting method that comes in two forms: contractual and common law. In this article we will discuss contractual indemnity provisions that can be found in construction contracts.
Florida Statute 725.06
Typically, disputing parties have the ability to contract for different obligations and rights. According to Florida law, any contracts of indemnity that seek to indemnify another party against their own unjust acts are observed with dissatisfaction in Florida. However, regardless of the courts in Florida’s disapproval of these provisions, there are still ways to enforce it. With contractual indemnity provisions, parties should be aware of and comply with Florida Statute 725.06. This particular statute applies to any construction contract in correlation to construction alteration, demolition, or repairing a building, structure, appliance, or appurtenance. It also applies to contracts between owners, contractors, subcontractors, architects, and engineers. Statute 725.06 goes into effect when any of these parties “promises to indemnify or hold harmless the other party to the agreement, contract, or guarantee for liability for damages to persons or property caused in whole or in part by any act, omission, or default of the indemnitee arising from the contract or its performance.”
To be able to hold an indemnitee accountable for any damages produced by the indemnitor, the indemnity provision must incorporate:
- a financial restriction on the size of the indemnification that has a rational commercial association to the contract
- the indemnity provision has a role in the project specifications or bid documents
If it happens that the contracting parties are unable to follow these requirements, the indemnity provision will become void, and therefore unenforceable. It is recommended that parties give careful deliberation when drafting an indemnity provision. We advise you to contact your Orlando construction attorney for assistance when drafting this provision.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.