Is a new construction project or home renovation in your future? If so, with any building project, there are many “moving parts,” all of which are important. You may be asked to sign something in the process called the Hold Harmless Agreement. This is an agreement signed by two or more parties that indicate that they relinquish their right to liability if someone is injured. For example if you’re hiring a contractor or other service provider to work on your property and don’t wish to be held liable for that person (or his or her employees) getting injured while working on your project. This may be requested prior to construction.
Hold harmless agreements are frequently used in business transactions, commercial contracts, and higher-risk activities where the chances of minor to moderate injuries exist. These are businesses such as tour companies, especially those with boats, companies that rent jet skis, conduct bungee jumping, and other potentially risky activities. But the agreement is not a document that allows a party to legally waive or limit responsibility in all situations.
A “hold harmless agreement” is also called an “indemnity agreement,” “no-fault agreement,” “release of liability,” or a “waiver of liability.”
What It Means
Basically, this type of agreement is used when you want to protect yourself against someone coming onto your property and becoming injured. This could be a construction worker working for the builder or someone coming to make repairs such as an appliance or electrical system. The hold harmless agreement is signed by two parties. It simply puts in writing an agreement that in the case of an injury, you or the other party have signed away your rights to sue in the case of an injury.
This waiver of liability may also be written into contracts and intended to protect one or both parties from a lawsuit. However, a waiver does not protect against negligence nor does it protect a responsible third party against a lawsuit if they are responsible and/or negligent such as an injury caused from substandard equipment.
Ideally, you should work with an experienced lawyer who understands construction law and contracts. If you are presented with an agreement by a builder, architect, or some other party, it is essential that you have it reviewed by your own legal counsel before signing, so that you understand what it means, and you are not signing something that is beneficial to the other party but detrimental to you.
Not Valid In Hawaii
These agreements are usually legally binding contracts and are valid in some states. But Hawaii state law considers hold harmless agreements, called “indemnity agreements” in the state statute, to be invalid:
§431:10-222 Construction industry; indemnity agreements invalid. Any covenant, promise, agreement, or understanding in, or in connection with or collateral to, a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenance, or appliance, including moving, demolition, or excavation connected therewith, purporting to indemnify the promisee against liability for bodily injury to persons or damage to property caused by or resulting from the sole negligence or wilful misconduct of the promisee, the promisee’s agents or employees, or indemnitee, is invalid as against public policy, and is void and unenforceable; provided that this section shall not affect any valid workers’ compensation claim under chapter 386 or any other insurance contract or agreement issued by an admitted insurer upon any insurable interest under this code. [L 1987, c 347, pt of §2]
If you are presented with one, speak with a construction law attorney prior to signing your contracts and moving forward.
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