Express Indemnification Clauses: Better Safe Than Sorry

It used to be taken for granted that when a claim arose out of a construction project, contractors and subcontractors, and even some suppliers, could point the finger at those who provided labor or materials behind them in the contractual chain. For instance, in a claim by an owner against a contractor for providing defective materials to a project, the contractor would inevitably point the finger at the supplier that actually furnished the materials. To the extent the contractor was liable to the owner, the contractor would simply bring a claim against the supplier for reimbursement. To the extent the contractor seeks to be partially reimbursed from the supplier, the claim is generally called one for "contribution." When the contractor seeks to be fully reimbursed, the claim is referred to as "indemnification." However, the North Carolina Court of Appeals recently set strict limits on when contribution and indemnification claims can be asserted in the construction context.