In a construction lawsuit, attorney J.D. Elliott explains his first step in reviewing the original contract is to immediately scan to find the indemnity clause.
Whether the defendant is the general contractor or a subcontractor with a limited scope of work, the indemnity clause is extremely important. As a general contractor, it is preferred to have an indemnity clause that the South Carolina Courts will hold valid, while a subcontractor may want to discredit the indemnity clause in the contract.
In 2018, the South Carolina Court of Appeals in Concord and Cumberland held that an indemnity clause must be “clear and unequivocal” in its intent to hold a subcontractor responsible for the concurrent negligence of the general contractor and the subcontractor. Concurrent negligence occurs when both the general contractor and the subcontractor are negligent.
In Concord and Cumberland, the Court held that there is no verbatim phrase that will meet the “clear and unequivocal” standard, but there must be some language that shows the intent to absolve the general contractor from the consequences of its concurrent negligence.
Often in construction defect cases, the Plaintiffs will allege that the general contractor is negligent in supervising the scope of work of its individual subcontractors. Under this allegation, the general contractor and the subcontractor can be concurrently negligent, which is why it is important for a general contractor to include language in its indemnity clause that the Court will find that the intent was absolve the general contractor for any concurrent negligence.
If there is concurrent negligence and the Court finds that the language in the subcontract is not clear and unequivocal in its intent to absolve the general contractor for concurrent negligence, then the general contractor has no recourse against its subcontractors.
Without more guidance from the Courts, we do not have an exact phrase that the Courts will find clear and unequivocal, but there likely should be some mention of indemnity in situations of concurrent negligence.
For more information, contact J.D. Elliott