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Indemnity Provisions Upheld Despite Lack of Monetary Limitation

In CB Contractors, LLC v. Allens Steel Products, Inc., 2018 WL 6579215 (Fla. 5th DCA 2018), Florida’s Fifth District Court of Appeal held that only a “portion” of the indemnity provision in the contract was void and unenforceable for violating Section 725.06, Florida Statutes, leaving the majority of the provision intact.

Section 725.06, Florida Statutes, states that any portion of a construction contract is void and unenforceable if one party promises to indemnify the other party to the contract for liability for damages caused by the indemnitee unless the contract contains a monetary limitation on the extent of the indemnification that bears a reasonable commercial relationship to the contract.

The case began after a condominium association brought construction defect claims against the general contractor for the project. The general contractor then brought claims against the subcontractors based on indemnity provisions within the subcontract requesting the subcontractors indemnify the general contractor for the condominium association’s claims. The lower court decided in favor of the subcontractors based on the fact that the subcontract indemnity provisions did not contain the monetary cap required by Section 725.06, Florida Statutes.

On appeal, Florida’s Fifth District Court of Appeal reversed the trial court’s findings that the entire indemnity provisions were null and void making the subcontractors liable to the general contractor for damages caused by the subcontractors.

Author’s note: 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. Regulations and laws may vary depending on your location. Consult with a licensed attorney in your area if you wish to obtain legal advice and/or counsel for a particular legal issue.