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Senate Bill 138 (Calderon - 2007)

Chapter 32, Statutes of 2007

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Provides that for all residential construction contracts entered into after January 1, 2008, all provisions, clauses, covenants, and agreements contained in any such construction contract that purport to require the subcontractor to indemnify, including cost to defend, the general contractor or contractor not affiliated with the builder against liability for construction defect claims, would be unenforceable to the extent the claims arise out of, pertain to, or relate to the negligence of the nonaffiliated general contractor or nonaffiliated contractor or their agents, other servants, or independent contractors who are directly responsible to the nonaffiliated general contractor or nonaffiliated contractor, or for design defects furnished by those persons, or to the extent the claims do not arise out of, pertain to, or relate to the scope of work in the written agreement between the parties. Provides that the above section could not be waived or modified by contractual agreement, act, or omission of the parties, and that contractual provisions, clauses, covenants, or agreements not expressly prohibited in the bill would be reserved to the agreement of the parties.

This non-controversial measure seeks to close a potential loophole in a 2005 legislative enactment regulating indemnification agreements in residential construction contracts. It would clarify that all builders are subject to the statute by specifying expressly that contractors and general contractors that are not affiliated with the builder are within the rule applicable to every other builder.