**********************
MUTUAL INDEMNITY
**********************
Ken
We recently purchased your Elevator Monitoring Agreement. A client is now asking for “mutual indemnification”. How do I go about this?
Tom
********************
RESPONSE
********************
I prefer no indemnity to mutual indemnity. Instead of indemnity let each party rely on its own insurance. Waive subrogation rights. All these contract terms sound interesting and great, but they look much different when looked at by a litigation attorney rather than the transactional attorney who wrote it.
If each party has to indemnify the other for its own negligence, how does that get determined when the loss occurs, when the claim is made, when the lawsuit starts? Will one party accept the tender of defense? No, they won't. And most cases get settled; they don't end by determination after trial when a judge or jury would assign percentage of blame.
Indemnity is important, especially to your insurance carrier who hopes to shift its defense obligation to the indemnifying party. That won't happen unless there is a clear one way indemnity provision, and even then tender of defense demands are often ignored. I just sent a tender of defense letter. It has been ignored, so we are making a motion to compel indemnity. We'll win and we'll force the slow moving insurance carrier for the indemnifying party to pay all our legal fees and expenses. That's just how it is.
************************
CORP SUB ASKS FOR RESIDENTIAL INSTALLATION
************************
Ken,
We have a long time client in NY that has of course signed your Commercial All in One contract. They have asked us to perform a commercial and a residential installation for them in the U.S.V.I. Are we protected by our NY contract with them as additional work performed?
Thanks for your thoughts,
Jon S
************************
RESPONSE
************************
The prudent answer is that you should be licensed in the jurisdiction where you are going to do the work, in your case USVI. If no license is required then it's important that you enter into the contract in the jurisdiction where you are licensed, in this case NY, and in the jurisdiction where you want the contract enforced, again in NY. While you are probably not concerned with collection issues, you should be concerned with liability issues. A loss after the installation could and probably will result in a lawsuit against you if you did something wrong, or the subscriber or its insurance carrier thinks you did.
The contract protective provisions should hold up, particularly the commercial job. Since both you and the subscriber have a nexus in NY it's appropriate that the contract be executed here. If a license is required in USVI and you don't have one the contract should nevertheless be enforced if you have a jurisdiction and venue provision, which the contract should have.
It is not uncommon for a commercial subscriber to ask for a residential installation. You need a new and different contract for the residential job, the Residential All in One. The commercial job should have a Commercial All in One. You should not use the commercial form for a residential job.
**********************