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Looking at Florida law on indemnity for general contractors

A lot can go wrong in the course of a construction project. This is why the various contractors and other parties involved in construction have to have a solid plan and must communicate effectively in carrying that plan out. Even with the best laid plans, though, something or other is bound to go wrong. Sometimes significant mistakes are made.

When such mistakes to happen, the general contractor is going to be liable for addressing and correcting the problem. Needless to say, in some cases, doing so can be costly. Fortunately, general contractors are not expected to always be on the hook for mistakes made by contractors working under them. 

Under Florida common law indemnity rules, general contractors can hold subcontractors accountable for indemnification when the subcontractor fails to use due care in the performance of work. Likewise, subcontractors can seek indemnity from contractors working under them. The key requirement with indemnity is that there must be “privity” of contract between the parties, meaning that there must be a contractual relationship for indemnification to occur.

There are some limitations on indemnity. For one thing, indemnity agreements in construction contracts are not enforceable unless a reasonable monetary limitation on the extent of the indemnification is included in any bid documents or project specifications. Also, a general contractor may not recover indemnity against a subcontractor in connection with defects and material supplied by the general contractor, if the general contractor required and appointed an architect to approve the materials and the defects could have been discovered during inspection and approval. General contractors may also not be reimbursed if they had actual notice of the defects and those defects are the proximate cause of injury to another.

Contractors can and should, of course, always work with an experienced attorney both to negotiate smart indemnity agreements and to address the issue of indemnity when it arises, both to ensure their contractual rights are respected and to minimize liabilities. 

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