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Burgese v. The Ryland Group, Inc.

A-2498-02T3 (N.J. Super. App. Div. 2004) (Unpublished)

CONTRACTS; INDEMNIFICATION—Where an indemnification clause does not specifically say that a subcontractor is liable for losses caused by a general contractor, the agreement will not be construed to require such indemnification.

A general contractor hired a subcontractor to perform framing and carpentry work. The general contractor required the subcontractor to sign an agreement with an indemnification clause. The provision required the subcontractor to indemnify the general contractor for all liability arising out of the subcontractor’s work provided that it was caused in whole or in part by the subcontractor’s negligence.

A worker was injured on the job and sued the general contractor and subcontractor. Both the general contractor and subcontractor were found to be negligent. The general contractor claimed that the indemnification clause required the subcontractor to indemnify the general contractor for the general contractor’s negligence as long as the subcontractor was at least partially negligent. The lower court disagreed and the general contractor appealed. The Appellate Division affirmed.

The New Jersey Supreme Court has established a clear standard for indemnification agreements. An indemnification agreement will not be construed to indemnify the indemnified party against losses arising out of its own negligence unless such an obligation is explicitly and unequivocally stated in the agreement. The Appellate Division noted that because the indemnification clause did not specifically say that the subcontractor was liable for losses caused by the general contractor, the agreement could not be construed to require the subcontractor to indemnify the general contractor for those losses caused by the general contractor.


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