Background Image
Previous Page  25 / 48 Next Page
Information
Show Menu
Previous Page 25 / 48 Next Page
Page Background

PCCA Journal|1

st

Quarter 2010

25

There are many risk shifting clauses

typically found in the General Condi-

tions, and the subcontractor should

insist upon receiving and carefully

reviewing these documents before

incorporating their terms into the

subcontract.

Indemnification Clauses

The owner usually attempts to re-

quire the contractor to indemnify the

owner for all losses incurred related

to the construction work. Unsurpris-

ingly, owners prefer to make the

contractor liable for anything and

everything that happens on the job

related to the project. For example:

The Contractor shall indemnify

and hold the Owner, its employ-

ees, agents, officers and other con-

tractors, harmless from any and all

claims, suits, liabilities or actions

of any kind arising out of or relat-

ing to the work of the Contractor

and its agents, officers, employees,

and subcontractors and suppliers

at any tier.

Such a clause can put all liability

onto the contractor even for problem

caused by or otherwise the respon-

sibility of the owner. For example,

assume that the owner’s representa-

tive drives his truck into a backhoe

of the contractor and is injured. As

the liability for the employee’s claim

“relates to the work” of the contrac-

tor, the contractor would be liable

for all damages regardless of the fact

that the owner’s employee may have

been negligent.

The effectiveness of such indem-

nification provisions is limited by

many statutes that render indemnifi-

cation agreements unenforceable to

the extent that they attempt to shift

liability from a negligent party to a

non-negligent party to a construc-

tion contract. It is important to note,

however, that this limitation may be

overcome if the contracting parties

provide for effective insurance cover-

age for indemnity.

Contractors should avoid these all-

inclusive indemnity clauses. Instead,

liability for claims on a construction

project should be allocated based on

fault. In other words, if the owner or

its agents are 90 percent at fault and

the contractor is 10 percent at fault,

the contractor should only be re-

quired to pay 10 percent of the loss.

This is an equitable division of li-

ability that encourages each party to

control all risks in their own power.

No Damages for Delay Clauses

An owner will frequently attempt

to limit its liability to the contrac-

tor for delay damages by including

Continued on page 26

www.aevenia.com

218.284.9500

3030 24th Ave So. Moorhead, MN 56560

We are Aevenia, Inc., a premier energy and electrical construction company. We

offer a powerful bundle of services and back it up with 40 years in the energy and

electrical construction industry. Every day, we show our customers what it’s like to

do business where trust, integrity, efficiency and quality are principal values.

We are Aevenia.

The way energy moves.

TRANSMISSION & DISTRIBUTION

DATA COMMUNICATIONS

RENEWABLES

SUBSTATIONS

URBAN & RURAL TELECOM

POWER PLOWING & TRENCHING

ELECTRICAL CONTRACTING

VISIT US AT BOOTH #7020 DURING WINDPOWER 2010

CALL TO SCHEDULE YOUR MEETING TODAY