Contracts indemnifying third parties may be voided by law

The New York legislature has proposed bill A05026 wherein General Obligations Law Section 5-322.1 would be amended to forbid an agreement to indemnify a promisee for damages caused by third party negligence.  Section 5-322.1 already forbids indemnification agreements that seek to indemnify the promisee for the promisee’s own negligence but this law would extend that prohibition to indemnification of third parties.  The legislature has stated that part of the justification for this amendment is that a “subcontractor should be responsible for its own negligence but not for the negligence of unrelated third parties.”

Vincent T. Pallaci is a partner at the New York law firm of Kushnick Pallaci, PLLC where his practice focuses primarily on the area of construction law.  He can be reached at (631) 752-7100 or vtp@kushnicklaw.com

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