MRM
Geotechnical
- Jun 13, 2002
- 345
Every so often, our company brings our professional liability insurance carrier rep into our office to give the project managers a refresher course on contract language. Recently we had one such visit. We were reviewing a clause in a fictitious contract that read:
Indemnity
“The Consultant agrees to indemnify, defend and hold harmless the Client, its officers, employees and agents from any and all allegations and claims arising in whole or in part out of the acts, errors or omissions of the Consultant, except for those caused by the sole negligence of the Client.”
This clause, when given to a consultant (us) from a potential client to sign is, of course, asinine on so my levels. As we were discussing how we would approach this from a negotiation angle, I casually remarked that this clause, as is, would likely never be truly enforceable. The insurance rep and others jumped on me. They told me that anything you sign is entirely enforceable.
I agree that we should treat this type of language as if it actually WERE enforceable, but I do not believe that a judge (if a case based on this clause ever went to trial) would generally rule in the clients favor.
First of all, there are no limits. “Defend and hold harmless?” To make this enforceable, I put it to you that the client would need to include a limit such as “defend and hold harmless up to $1,000,000, the limits of Consultants insurance.
Second, “…claims arising in whole or in part out of the acts, errors or omissions….except for those caused by the sole negligence of the Client.” Again, this is ridiculous. Any judge worthy of being on the bench would need to see, at least, a dollar figure: if client is 90% at fault and client is 10% at fault, then the Consultant is in the clear. There must be something.
My summary: Treat this clause as if it were enforceable and negotiate as appropriate. Perhaps in the vast theory of law, the clause could somehow be enforceable, but in the real world, it would never be enforceable as is.
We’ve got some very intelligent people out there in this group that can probably speak to this. What say you?
Indemnity
“The Consultant agrees to indemnify, defend and hold harmless the Client, its officers, employees and agents from any and all allegations and claims arising in whole or in part out of the acts, errors or omissions of the Consultant, except for those caused by the sole negligence of the Client.”
This clause, when given to a consultant (us) from a potential client to sign is, of course, asinine on so my levels. As we were discussing how we would approach this from a negotiation angle, I casually remarked that this clause, as is, would likely never be truly enforceable. The insurance rep and others jumped on me. They told me that anything you sign is entirely enforceable.
I agree that we should treat this type of language as if it actually WERE enforceable, but I do not believe that a judge (if a case based on this clause ever went to trial) would generally rule in the clients favor.
First of all, there are no limits. “Defend and hold harmless?” To make this enforceable, I put it to you that the client would need to include a limit such as “defend and hold harmless up to $1,000,000, the limits of Consultants insurance.
Second, “…claims arising in whole or in part out of the acts, errors or omissions….except for those caused by the sole negligence of the Client.” Again, this is ridiculous. Any judge worthy of being on the bench would need to see, at least, a dollar figure: if client is 90% at fault and client is 10% at fault, then the Consultant is in the clear. There must be something.
My summary: Treat this clause as if it were enforceable and negotiate as appropriate. Perhaps in the vast theory of law, the clause could somehow be enforceable, but in the real world, it would never be enforceable as is.
We’ve got some very intelligent people out there in this group that can probably speak to this. What say you?
