Indemnification clause in contract from builder

moominpops

Hi everyone, not sure if this is the correct place to post, but feel free to move it if it’s not.

I have received a contract from someone who will be doing work for us on our home today and I am happy with it but I’m not sure about this paragraph:

”The client agrees to indemnify, defend and protect “Company” from and against all lawsuits and costs of every kind pertaining to the services, any false information delivered by the client pertaining to the property, or failure to deliver relevant information by the Client.”

Does anyone know what this means? I thought possibly it would be on us if we didn’t disclose things about the property which might mean something is damaged etc and it will be our fault? I’m probably wrong though.

Would be very grateful for your help.

Thanks!

Aylesbury_Duck

Like you, I'm concerned about the first part of that sentence.  The rest I can understand - them not being responsible if you give them false information - but the sentence says that you agree to indemnify them against any part of the service.

If I've understood it correctly, it's concerning.  More qualified posters may take a different view but if they agree, find another builder.

davidmcn

I'm not sure the clause means a great deal to be honest, at least not something which would be enforceable in a consumer contract. I'd suggest removing it and asking them to explain what they think it means if they object - the reference to "lawsuits" suggests somebody lifted it from an American contract because they thought it looked good.

I suspect they might just mean "we're not liable for things you ought to have disclosed to us", which is probably fair enough, though indemnity clauses are more usually about covering their costs for claims against them by third parties.

DoaM

They should have public liability and professional liability insurance policies in place - those policies would be their indemnity cover.

As above, strike out the clause (and initial it) before you sign the contract.

Maniak

Indemnity clauses are valid in English law and in consumer contracts too. Think of an indemnity as handing over a blank cheque so that if you are in breach of that clause, the contractor puts a figure of on the cheque and you pay him. Unlike the normal rules for breach of contract where you have to prove your losses and that your breach had caused the contractor to suffer that loss as well as mitigate those losses, these requirements don't apply for an indemnity hence why I referred to it as a blank cheque.

For that reason they are the worst kind of clause you want in a contract and I agree with davidmcn that the reference to lawsuits suggests the company has lifted it from an a contract of a different country because we don't use the word lawsuit over here.

It could even be said that the first part of that clause may be interpreted as a "reverse indemnity" i.e. indemnifying the company for their own acts and omissions, because it says you agree to indemnity the company from any claims or costs relating to the services meaning that it could include any claims you make against them, effectively cancelling each other out.

Jumblebumble

moominpops said:

Hi everyone, not sure if this is the correct place to post, but feel free to move it if it’s not.

I have received a contract from someone who will be doing work for us on our home today and I am happy with it but I’m not sure about this paragraph:

”The client agrees to indemnify, defend and protect “Company” from and against all lawsuits and costs of every kind pertaining to the services, any false information delivered by the client pertaining to the property, or failure to deliver relevant information by the Client.”

Does anyone know what this means? I thought possibly it would be on us if we didn’t disclose things about the property which might mean something is damaged etc and it will be our fault? I’m probably wrong though.

Would be very grateful for your help.

Thanks!

I hope you have good insurance to cover your obligation to defend the company against any lawsuits that you might bring.
LOl

eddddy

Hmmm - it looks like they found that text on a US website that offers a "Landscaping Services Contract Template". It says:  

8. Indemnification
The Client agrees to indemnify, defend, and protect the Landscaper from and against all lawsuits and costs of every kind pertaining to the Landscaping Services, any false information delivered by the Client pertaining to the Property, or failure to deliver relevant information by the Client.

Link:https://www.pandadoc.com/landscaping-services-contract-template/

The US site adds a tip to explain what that clause is supposed to mean:

PandaTip: By way of example, in the event a third party sues the Landscaper after slipping and falling in the Client’s property and blames the landscaping design, then the Client will cover the costs to the Landscaper in such an action.

On the basis that the person you're dealing with copied a chunk of text from a US website, they probably don't really understand it, so maybe they won't object if you say you want it removed.

Did they copy the rest of their contract from that US website? Maybe even including:

10. Applicable Law
This Consulting Agreement and the interpretation of its terms shall be governed by and construed in accordance with the laws of the State of [STATE] and subject to the exclusive jurisdiction of the federal and state courts located in [COUNTY], [STATE].

steampowered

The first part of the clause says "The client agrees to indemnify, defend and protect “Company” from and against all lawsuits and costs of every kind pertaining to the services".

That would appear to be all encompassing ! The phrases "any false information delivered by the client pertaining to the property" and "failure to deliver relevant information by the Client" are additional.

Personally I would ask for the clause to be removed. Or at least the words "pertaining to the services".

unholyangel

Maniak said:

Indemnity clauses are valid in English law and in consumer contracts too. 

No, they're not. 

The words indeminify & indemnity are considered legal jargon, which breaches the transparency and plain & intelligible language requirements. Then of course there is the fact that indemnity goes farther than just being liable for losses reasonably incurred & foreseeable. So objectionable on those grounds even without the transparency/plain & intelligible language requirements. 

I will however agree that it's the worst kind of clause. The law already allows recovery of losses from a party in breach so there's no need for an indemnity clause unless you're purposely trying to make them liable for something the law wouldn't make them liable for. 

unholyangel

DoaM said:

They should have public liability and professional liability insurance policies in place - those policies would be their indemnity cover.

As above, strike out the clause (and initial it) before you sign the contract.

Agree with the first part but remember, a variation to the terms of an offer will amount to a counter offer, not acceptance.