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Constructions contracts; indemnity

SB 138, c. 32

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SB 138, c. 32: Constructions contracts; indemnity. 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.

There were three co-sponsors of this measure: the Pacific Rim Drywall Association, the California Concrete Contractors Association, and the Southern California Contractors Association. The bill was supported by the American Fence Contractors Association's California Chapter, the American Subcontractors Assoc. in California, the California Fence Association, the Engineering Contractors Association, the Flasher/Barricade Association, the Marin Builders Exchange, and the Western Electrical Contractors Association.

The bill's sponsor explains, "Proposed new subsections (e)(1) and (2) seek to prevent any action or practice in contracting for residential construction, which would circumvent or invalidate the purpose and intent of Civil Code Section 2782 (c) and (d), through narrow interpretation or misuse of the definition of 'builder.' . . "

The author and supporters intend for this bill to clarify that AB 758 was and is intended to apply to all residential construction contracts between builders/general contractors/contractors and subcontractors.

If you would like to order the legislative history of this bill [click here] .