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Daly v. K-Mart Corporation v. R.J. Reynolds Tobacco Company

A-1461-96T5 (N.J. Super. App. Div. 1997) (Unpublished)

CONTRACTS; INDEMNIFICATION—An indemnification clause in a purchase order for goods does not extend to a situation where the indemnifying party’s employee slips and falls in the indemnified party’s retail store.

An employee of a supplier was injured in a slip and fall while in an aisle of its customer’s store, packing cigarette racks and hanging advertising and display promotions. She sued the retailer, who then filed a third party complaint against the supplier for indemnification. The indemnification clause on the back of the retailer’s purchasing order required indemnification for injuries “arising out of any use, possession, consumption, or sale of said merchandise.” The supplier was granted summary judgment when the Trial Court judge concluded that the clause unambiguously related to products liability claims brought against the retailer in connection with the sale of the supplier’s merchandise. The retailer appealed.

The Appellate Division affirmed, holding that the indemnification clause does not cover claims arising out of unrelated negligence in the maintenance of the retailer-customer’s premises. The Court stated that an indemnification provision will not be construed to indemnify against negligence unless that intent is expressed unequivocally. The Court also stated that the clause must be interpreted with its common sense meaning.


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