The enactment of S0395 will fundamentally change how construction and design contracts are structured in South Carolina. By making certain indemnity provisions unenforceable, the bill effectively shifts liability more fairly among parties involved in construction agreements. Supporters argue this change is necessary to prevent unfairly placing the burden of liability on design professionals, who may otherwise be compelled to assume risk for issues not directly attributable to their actions. It also promotes a clearer understanding of fault and responsibility in contractual relationships.
Summary
Bill S0395 aims to amend Section 32-2-10 of the South Carolina Code to set limitations on the enforceability of indemnification provisions in construction and design professional agreements. Specifically, the bill focuses on hold harmless clauses, which often compel one party to defend another against claims arising from their own negligence. The bill declares such provisions unenforceable. This amendment seeks to protect design professionals from bearing undue liability, aligning with public policy that encourages accountability within the construction industry.
Contention
As the bill progresses, various stakeholders express concerns. Advocates for the construction industry have praised the bill, asserting that it rectifies long-standing imbalances in liability allocation. Conversely, some critics fear that the bill's provisions could inadvertently expose promisees to greater financial risk, as they may lose protections traditionally offered under indemnification clauses. There are also debates around how enforcement of such changes could lead to increased litigation as parties reassess their contractual relationships in light of S0395.
Amending the act of July 9, 1970 (P.L.484, No.164), entitled "An act relating to indemnification agreements between architects, engineers or surveyors and owners, contractors, subcontractors or suppliers and indemnification agreements relating to snow removal or ice control services," providing for void and unenforceable provisions or terms in construction contracts; and making editorial changes.
Amending the act of July 9, 1970 (P.L.484, No.164), entitled "An act relating to indemnification agreements between architects, engineers or surveyors and owners, contractors, subcontractors or suppliers and indemnification agreements relating to snow removal or ice control services," further providing for title of act; and providing for indemnification agreements relative to construction contracts, including agreements for architectural, engineering or land surveying services.