• Home
  • Lawyers & Support
  • About Us
  • Services
  • Blog
  • Contact Us
  • Home
  • Lawyers & Support
  • About Us
  • Services
  • Blog
  • Contact Us
  • Home
  • Lawyers & Support
  • About Us
  • Services
  • Blog
  • Contact Us

Indemnity Clauses That Conflict with Oregon Indemnity Statute Can Remain Partially Valid and Enforceable

  • Posted by Masaki J. Yamada
  • On November 30, 2016
  • In Claims, Construction Defect, Construction News and Notes, Contracting, Damages, Indemnity, Memorable Quotes, Rants and Raves

When the indemnity provision of a contract conflicts with ORS 30.140, it is voided to the extent that it conflicts with the statute, but no more.  Such provisions can remain partially valid and enforceable.[i]  In Montara Owner Assn., the owner brought claims against the contractor for construction defects and damage relating to the construction of 35 townhouses.  Contractor then brought third-party claims against more than 20 subcontractors for breach of contract and indemnity.  Before trial, contractor settled with all but one subcontractor.  The subcontract contained an indemnity provision requiring subcontractor to indemnify contractor for losses arising out of subcontractor’s work, including losses caused in part by contractor’s own negligence.

The trial court ruled that the entire indemnity clause was void under ORS 30.140(1).  As a result, the general contractor had no recourse against the subcontractor for seeking indemnity.

The Court of Appeals overturned the trial court, finding that “[a]n indemnity clause that offends ORS 30.140(1) because it requires a subcontractor to indemnify a contractor for the contractor’s own negligence remains enforceable to the extent that it also requires the subcontractor to indemnify the contractor for the subcontractor’s negligence.”  The subcontractor appealed the decision to the Oregon Supreme Court.

The Supreme Court affirmed the Court of Appeals decision.  The Court noted that “the legislature appears to have been more concerned about the practical outcome of the contract provisions:  essentially, that the “[sub]contractor [should] be responsible for the [sub]contractor’s actions, and the [general contractor should] be responsible for the [general contractor’s actions].”  As a result, only the part of the indemnity provision that ran contrary to ORS 30.140(1) was void, while the remaining part of the indemnity provision of the subcontract was enforceable.

[i] Montara Owners Assn. v. La Noue Development, LLC, 357 Or. 333, 353 P.3d 563 (2015).

Previous Post

GAO Sustains Unsupported Past Performance Evaluation and Unequal Discussion Bid Protest

Next Post

Courts Take Another Swipe at the Implied Warranty of the Plans and Specifications
0 comments on Indemnity Clauses That Conflict with Oregon Indemnity Statute Can Remain Partially Valid and Enforceable
Blog Categories
Recent Posts
  • GENERAL CONTRACTORS HAVE EXPANSIVE COMMON LAW AND STATUTORY DUTIES TO PROVIDE A SAFE WORKPLACE
  • Landlord Duties of Repair and Covenant of Quiet Enjoyment
  • Certificates of Insurance May Confer Coverage
  • Ahlers Cressman & Sleight Nationally Ranked as a 2020 “Best Law Firm” by U.S. News – Best Lawyers®
  • Design-Assist, an Ambiguous Term Causing Conflict in the Construction Industry[1]
Archives
Get Construction Law Blog Updates
* = required field
Scroll

TERMS OF USE   |   PRIVACY POLICY   |   LEGAL DISCLAIMER

206-287-9900

999 Third Avenue, Suite 3800
Seattle, WA 98104

Copyright © Ahlers Cressman & Sleight PLLC - All Rights Reserved