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Indemnity Agreement May Not Protect Contractor From Liability

Thursday, October 04, 2007 12:52 pm

Indemnity Agreement May Not Protect Contractor From Liability

The Texas Court of Appeals ruled that a general contractor could not recover damages from a subcontractor for the workplace injury of one of the latter's employees -- despite a clause in the contract intended to shield the general contractor from such liability. While the contract specified that the general contractor wouldn't be liable for the subcontractor's negligence, the court stated that, in this case, the determination of which party was negligent could only be based on the initial complaint of the employee who had sued and later settled with the general contractor. Gilbane Building Company (Gilbane) had enlisted subcontractor Keystone Structural Concrete (Keystone) for a construction project in which one of Keystone's employees was injured. The employee sued Gilbane for negligence and settled for $2,000,000. The employee was barred from suing his direct employer, Keystone, for the injury because Texas Labo [...]

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