When Indemnification Clauses in Construction Contracts Leave Parties Feeling Void

Written by Matt Daly, Esq.

Edited by Bill Pfund, Esq.

A critical step in every construction defect claim is to review the contracts between the parties involved in the construction to evaluate the indemnification rights and obligations of the parties.  Virginia Code § 11-4.1 plays an important role in that process.  This section, which renders certain indemnification provision void, states in pertinent part:

“Any provision contained in any contract relating to the construction, alteration, repair or maintenance of a building, structure or appurtenance thereto, including moving, demolition and excavation connected therewith, or any provision contained in any contract relating to the construction of projects other than buildings by which the contractor performing such work purports to indemnify or hold harmless another party to the contract against liability for damage arising out of bodily injury to persons or damage to property suffered in the course of performance of the contract, caused by or resulting solely from the negligence of such other party or his agents or employees, is against public policy and is void and unenforceable.”

For example, in layman’s terms, if a general contractor enters into a construction contract with a subcontractor that requires the subcontractor to indemnify the general contractor for the sole negligence of the general contractor, the entire indemnification agreement is void under the statute.  Notably, it’s the language of the indemnification provision in the contract – not the circumstances from which the claim for indemnification arose – that determines whether the indemnification provision is void under § 11-4.1.  Uniwest Construction, Inc. v. Amtech Elevator Services, 280, Va. 428, 441 (2010).

While § 11-4.1 obviously pertains to “construction contracts,” questions arise in litigation over what constitutes a “construction contract”, and who constitutes a “contractor” due to the numerous subcontractors, suppliers, and design professionals involved in construction projects.  Virginia courts have consistently ruled that contracts relating to the sale of materials and for the rental of equipment used in construction fall outside the purview of § 11-4.1.  Travelers Indemnity Company v. Lessard Design, Inc., 321 F. Supp. 3d 631, 636 (E.D. Va. 2018).

Despite those limitations, the Travelers case cited above illustrates the potentially expansive reach of § 11-4.1.  In Travelers, the U.S. District Court for the Eastern District of Virginia, interpreting the Virginia statute, voided an indemnification agreement in a contract for architectural services; the court found that the architectural services contract related to the “Construction Phase” of the project, thus bringing it within the scope of the statute.  Id.

The Travelers case was decided on the specific duties and obligations contained in the contract at issue in that case, and would not necessarily extend to any design professional contract.  Nonetheless, the extension of  § 11-4.1 to an architectural services contract shows that a careful analysis is required in both drafting and in determining the validity of an indemnification provision in any contract pertaining to a construction project.


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