Gilbane Building Co. v. Keystone Structural Concrete, Ltd.
263 S.W.3d 291 | Texas Court of Appeals, 1st District (Houston) | 2007
What This Case Means for Subcontractors
A worker injured on a construction site sued the general contractor (Gilbane), who paid $1 million to settle. Gilbane then tried to recover that settlement money from the subcontractor (Keystone) using an indemnity clause in their contract. The Texas court ruled against Gilbane because the indemnity agreement didn't explicitly say it covered the indemnitee's own negligence. This means broad indemnity clauses that don't specifically mention the GC's negligence won't hold up in court.
Key Takeaways
- •Indemnity agreements must expressly state they cover the indemnitee's own negligence or they're unenforceable—vague language won't work
- •A GC cannot recover settlement costs from a subcontractor after the fact without a valid, properly-worded indemnity agreement in place
- •Review your indemnity clauses now: if they don't explicitly mention covering the other party's negligence, they may be worthless if you need them
No obligation to indemnify arises unless the indemnification agreement complies with the express negligence test.
Frequently Asked Question
Can my indemnity agreement protect me if I have to pay for someone else's negligence?
Only if the agreement explicitly states it covers the other party's negligence. Broad or vague indemnity language won't be enforced in Texas. Courts require clear, express language naming negligence before you're obligated to indemnify someone for their own carelessness. Get your contracts reviewed by an attorney to ensure the language is specific.
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