Case Study: Importance of careful drafting and review of contracts
A 2013 case from the 7th Circuit Court of Appeals demonstrates the importance of careful drafting and review of contracts. In that case, the plaintiff died while operating a boom lift for his employer; the employer had rented the lift from a rental company. The plaintiff’s family brought suit against the rental company and the rental company sought indemnification from the employer pursuant to a clause in the rental agreement for the boom lift. The indemnification provision read as follows:
Indemnity. Customer [employer] agrees to indemnify and hold Company [rental company] harmless against any and all claims, demands, or suits (including costs of defense, attorney’s fees, expert witness fees, and all other costs of litigation) for any and all bodily injury, property damage, or any other damages or loss, regardless of whether such injury, damage or loss is caused in whole or in part by negligence, which arise out of, result from, or relate to the use, operation, condition or, presence of the equipment except where such injury, damage or loss is caused solely by the Company [rental company].
The rental company argued that this provision required that the employer indemnify them from the plaintiff’s claims of negligence. The Court, in reviewing other Indiana cases discussing similar provisions, found that the employer’s obligation to indemnify the rental company for its own partial negligence was only implicit, not explicit as is required. Therefore, the Court held, the employer did not “knowingly and willingly accept the burden of indemnifying [the rental company] for [its] own negligence.” This seemingly innocuous provision caused a shift in responsibility for paying damages likely in the millions of dollars.
Kroger Gardis & Regas and our Construction Law Group provide counsel to engineers, architects and surveyors across Indiana. You can contact Greg Cafouros at firstname.lastname@example.org or by phone at 317-777-7411 for consultation and more information.
 NES Rentals Holdings, Inc. v. Steine Cold Storage, Inc., 714 F.3d 449 (7th Cir. 2013)
 See, e.g., Moore Heating & Plumbing, Inc. v. Huber, Hunt & Nichols, 583 N.E.2d 142 (Ind.Ct.App.1991); GKN, 798 N.E.2d 548.
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