Reader Patrick Grant, assistant general counsel of S & B Engineers and Constructors, told me about the new “anti-indemnity” law that the Texas legislature recently passed.
Go here for the full text of House Bill 2093, but here’s the part that Patrick was interested in:
Sec.A151.102. AGREEMENT VOID AND UNENFORCEABLE. Except as provided by Section 151.103, a provision in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable as against public policy to the extent that it requires an indemnitor to indemnify, hold harmless, or defend a party, including a third party, against a claim caused by the negligence or fault, the breach or violation of a statute, ordinance, governmental regulation, standard, or rule, or the breach of contract of the indemnitee, its agent or employee, or any third party under the control or supervision of the indemnitee, other than the indemnitor or its agent, employee, or subcontractor of any tier.
Sec.A151.103. EXCEPTION FOR EMPLOYEE CLAIM. Section 151.102 does not apply to a provision in a construction contract that requires a person to indemnify, hold harmless, or defend another party to the construction contract or a third party against a claim for the bodily injury or death of an employee of the indemnitor, its agent, or its subcontractor of any tier.
I leave it to others to consider the broader implications of this law. I’ll limit myself to noting that using “magic words” in a statute is just as unhelpful as using them in a contract—maybe more so, as the resulting confusion is inflicted not just on the parties to a given contract.
I’d ask the drafters this: What do you think hold harmless means? I wager they never gave the matter any thought. Even if they did, who cares—the phrase has no generally accepted meaning. (See this January 2007 blog post.)
Furthermore, because the drafters dumped into the statute the hack triplet of indemnify, hold harmless, and defend, some might be tempted to argue that the statute doesn’t cover contracts that accomplish the same end using different verb structures, such as be liable for.
So the construction industry would have been better off if the drafters of House Bill 2093 had expressed the scope of the statute more generally.