Indemnification Agreement Not Enforceable
By Alex Barthet
A concrete company rented a pumper and was using it at a job site when a construction worker was struck and injured by the pumper’s hose. Claims were filed against both the concrete company and the rental company that supplied the pumper. The rental company settled but then sought to recover from the concrete company what it paid out. How could it do that? It relied on the language in its rental agreement with the concrete company. That agreement included an indemnification clause, indemnifying the rental company from claims associated with the use of the pumper.
The concrete company resisted, something the rental company thought was a loser given the language within its rental agreement. But to the rental company’s surprise, the indemnity provision in its rental agreement was found to be unenforceable. It didn’t contain a dollar limit as to the concrete company’s potential liability, and without that limitation, this indemnification was considered too vague by the judge and wouldn’t be enforced.
A good result for the concrete company and a good lesson for all construction companies relying on agreements which may not have been reviewed by their construction lawyer. Not all those indemnification provisions are automatically enforceable.