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New Indemity Law Regarding Construction Contracts

Effective January 1, 2014, "Type I" indemnity provisions in California Construction contracts are prohibited.

SB 474 prohibits the inclusion of a Type I Indemnity provision in a private construction contract.  Type I indemnity provisions have generated much litigation and headaches over the years for subcontractors.  Type I indemnity provisions required that a subcontractor insure, indemnify, and/or defend a general contractor or CM from the GC or CM's active negligence, wilful misconduct, design defect, or from claims that do not even arise from the work of the sub.  The new law reflects a public policy decision by the California Legislature that subcontractors should be protected against the being forced to indemnity a GC because of the GC superior bargaining power.

     There are, of course, a number or exceptions.   If you are looking for guidance or assistance in this area, please feel free to contact me at [email protected]

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