Montana Code 28-2-2111. Construction contract indemnification provisions
28-2-2111. Construction contract indemnification provisions. (1) Except as provided in subsections (2) and (3), a construction contract provision that requires one party to the contract to indemnify, hold harmless, insure, or defend the other party to the contract or the other party’s officers, employees, or agents for liability, damages, losses, or costs that are caused by the negligence, recklessness, or intentional misconduct of the other party or the other party’s officers, employees, or agents is void as against the public policy of this state.
Terms Used In Montana Code 28-2-2111
- Construction contract: means a written agreement between an owner and a contractor for the contractor to construct or improve or to provide construction management for the construction or improvement of an improvement to real property. See Montana Code 28-2-2101
- Contract: A legal written agreement that becomes binding when signed.
- Contractor: means a person who has signed a construction contract with an owner. See Montana Code 28-2-2101
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Improvement: means all or a part of a residential or commercial building, structure, area of real property, quantity of earth or fill material, tree or shrubbery, driveway, roadway, or parking area. See Montana Code 28-2-2101
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Owner: means a governmental entity or private entity that has a legal interest in the real property improved or to be improved by the performance of the construction contract. See Montana Code 28-2-2101
- Property: means real and personal property. See Montana Code 1-1-205
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
(2)A construction contract may contain a provision:
(a)requiring one party to the contract to indemnify, hold harmless, or insure the other party to the contract or the other party’s officers, employees, or agents for liability, damages, losses, or costs, including but not limited to reasonable attorney fees, only to the extent that the liability, damages, losses, or costs are caused by the negligence, recklessness, or intentional misconduct of a third party or of the indemnifying party or the indemnifying party’s officers, employees, or agents; or
(b)requiring a party to the contract to purchase a project-specific insurance policy, including but not limited to an owner‘s and contractor‘s protective insurance, a project management protective liability insurance, or a builder’s risk insurance.
(3)This section does not apply to indemnity of a surety by a principal on a construction contract bond or to an insurer’s obligation to its insureds.
(4)As used in this section, “construction contract” means an agreement for architectural services, alterations, construction, demolition, design services, development, engineering services, excavation, maintenance, repair, or other improvement to real property, including any agreement to supply labor, materials, or equipment for an improvement to real property.