Section § 2772

Explanation

Indemnity is a kind of agreement where one person promises to protect someone else from being legally responsible for another's actions, or their own.

Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person.

Section § 2773

Explanation

This law says that if you make an agreement to protect someone from the consequences of doing something illegal, that agreement isn't valid if the person knows it's illegal at the time they're doing it.

 Section Twenty-seven Hundred and Seventy-three. An agreement to indemnify a person against an act thereafter to be done, is void, if the act be known by such person at the time of doing it to be unlawful.

Section § 2774

Explanation

This law says you can make an agreement to protect someone from the consequences of something they've already done, even if that act was wrong, as long as it wasn't a felony. So basically, covering for past actions is okay unless those actions were super serious crimes.

An agreement to indemnify a person against an act already done, is valid, even though the act was known to be wrongful, unless it was a felony.

Section § 2775

Explanation

This law states that if you agree to cover someone else’s actions, you’re also responsible for covering what their agents do as well.

An agreement to indemnify against the acts of a certain person, applies not only to his acts and their consequences, but also to those of his agents.

Section § 2776

Explanation

If you make an agreement to cover or protect multiple people from loss or damage (that's what indemnify means), the default rule is that this protection applies to each person separately, unless your agreement specifically says otherwise.

An agreement to indemnify several persons applies to each, unless a contrary intention appears.

Section § 2777

Explanation

If someone agrees to cover or protect another person against a specific action, they can be held responsible along with that person for any harm caused by the action.

One who indemnifies another against an act to be done by the latter, is liable jointly with the person indemnified, and separately, to every person injured by such act.

Section § 2778

Explanation

This law explains how to interpret indemnity contracts, which are agreements that provide protection against potential losses or liabilities. Key points include: If you're indemnified against being liable, you can seek compensation as soon as you're liable. If you're indemnified against claims or demands, you need to pay first before getting compensated. Indemnity covers costs of defense if done in good faith. An indemnifier must defend the person they protect if asked but the protected person may choose to handle their own defense. If the indemnifier fails to defend, their responsibility is established if the protected party faces losses in good faith. However, if the indemnifier wasn't aware of the need for defense or couldn't manage it, the judgment is only presumptive evidence. If the indemnifier had a strong defense but didn't apply it due to neglect, the judgment isn't binding on them.

In the interpretation of a contract of indemnity, the following rules are to be applied, unless a contrary intention appears:
1. Upon an indemnity against liability, expressly, or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable;
2. Upon an indemnity against claims, or demands, or damages, or costs, expressly, or in other equivalent terms, the person indemnified is not entitled to recover without payment thereof;
3. An indemnity against claims, or demands, or liability, expressly, or in other equivalent terms, embraces the costs of defense against such claims, demands, or liability incurred in good faith, and in the exercise of a reasonable discretion;
4. The person indemnifying is bound, on request of the person indemnified, to defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity, but the person indemnified has the right to conduct such defenses, if he chooses to do so;
5. If, after request, the person indemnifying neglects to defend the person indemnified, a recovery against the latter suffered by him in good faith, is conclusive in his favor against the former;
6. If the person indemnifying, whether he is a principal or a surety in the agreement, has not reasonable notice of the action or proceeding against the person indemnified, or is not allowed to control its defense, judgment against the latter is only presumptive evidence against the former;
7. A stipulation that a judgment against the person indemnified shall be conclusive upon the person indemnifying, is inapplicable if he had a good defense upon the merits, which by want of ordinary care he failed to establish in the action.

Section § 2779

Explanation

If you agree to cover the costs if someone else fails to uphold their duty, you have the right to be paid back like someone who co-signs a loan. This applies whether you know the exact amount you'll have to pay or not.

Where one, at the request of another, engages to answer in damages, whether liquidated or unliquidated, for any violation of duty on the part of the latter, he is entitled to be reimbursed in the same manner as a surety, for whatever he may pay.

Section § 2782

Explanation

This law is about how responsibility for mistakes and accidents is shared in construction contracts in California. It says that if you're contracting for construction work, you can't hold someone else responsible for your own big mistakes or negligence. This applies to both private property owners and public agencies, whether they're building something new or fixing something old. If there’s a mistake caused by a contractor or subcontractor, they have to address it if it's related to their work. The law also outlines how defense costs should be handled and what happens if someone fails to meet their responsibilities. Finally, it explains that you can still seek compensation from other parties involved, like suppliers or designers, but only if it’s fair and related to the issues at hand.

(a)CA Civil Law Code § 2782(a) Except as provided in Sections 2782.1, 2782.2, 2782.5, and 2782.6, provisions, clauses, covenants, or agreements contained in, collateral to, or affecting any construction contract and that purport to indemnify the promisee against liability for damages for death or bodily injury to persons, injury to property, or any other loss, damage or expense arising from the sole negligence or willful misconduct of the promisee or the promisee’s agents, servants, or independent contractors who are directly responsible to the promisee, or for defects in design furnished by those persons, are against public policy and are void and unenforceable; provided, however, that this section shall not affect the validity of any insurance contract, workers’ compensation, or agreement issued by an admitted insurer as defined by the Insurance Code.
(b)Copy CA Civil Law Code § 2782(b)
(1)Copy CA Civil Law Code § 2782(b)(1) Except as provided in Sections 2782.1, 2782.2, and 2782.5, provisions, clauses, covenants, or agreements contained in, collateral to, or affecting any construction contract with a public agency entered into before January 1, 2013, that purport to impose on the contractor, or relieve the public agency from, liability for the active negligence of the public agency are void and unenforceable.
(2)CA Civil Law Code § 2782(b)(2) Except as provided in Sections 2782.1, 2782.2, and 2782.5, provisions, clauses, covenants, or agreements contained in, collateral to, or affecting any construction contract with a public agency entered into on or after January 1, 2013, that purport to impose on any contractor, subcontractor, or supplier of goods or services, or relieve the public agency from, liability for the active negligence of the public agency are void and unenforceable.
(c)Copy CA Civil Law Code § 2782(c)
(1)Copy CA Civil Law Code § 2782(c)(1) Except as provided in subdivision (d) and Sections 2782.1, 2782.2, and 2782.5, provisions, clauses, covenants, or agreements contained in, collateral to, or affecting any construction contract entered into on or after January 1, 2013, with the owner of privately owned real property to be improved and as to which the owner is not acting as a contractor or supplier of materials or equipment to the work, that purport to impose on any contractor, subcontractor, or supplier of goods or services, or relieve the owner from, liability are unenforceable to the extent of the active negligence of the owner, including that of its employees.
(2)CA Civil Law Code § 2782(c)(2) For purposes of this subdivision, an owner of privately owned real property to be improved includes the owner of any interest therein, other than a mortgage or other interest that is held solely as security for performance of an obligation.
(3)CA Civil Law Code § 2782(c)(3) This subdivision shall not apply to a homeowner performing a home improvement project on his or her own single family dwelling.
(d)CA Civil Law Code § 2782(d) For all construction contracts, and amendments thereto, entered into after January 1, 2009, for residential construction, as used in Title 7 (commencing with Section 895) of Part 2 of Division 2, all provisions, clauses, covenants, and agreements contained in, collateral to, or affecting any construction contract, and amendments thereto, that purport to insure or indemnify, including the cost to defend, the builder, as defined in Section 911, or the general contractor or contractor not affiliated with the builder, as described in subdivision (b) of Section 911, by a subcontractor against liability for claims of construction defects are unenforceable to the extent the claims arise out of, pertain to, or relate to the negligence of the builder or contractor or the builder’s or contractor’s other agents, other servants, or other independent contractors who are directly responsible to the builder, or for defects in design furnished by those persons, or to the extent the claims do not arise out of, pertain to, or relate to the scope of work in the written agreement between the parties. This section shall not be waived or modified by contractual agreement, act, or omission of the parties. Contractual provisions, clauses, covenants, or agreements not expressly prohibited herein are reserved to the agreement of the parties. Nothing in this subdivision shall prevent any party from exercising its rights under subdivision (a) of Section 910. This subdivision shall not affect the obligations of an insurance carrier under the holding of Presley Homes, Inc. v. American States Insurance Company (2001) 90 Cal.App.4th 571. Nor shall this subdivision affect the obligations of a builder or subcontractor pursuant to Title 7 (commencing with Section 895) of Part 2 of Division 2.
(e)CA Civil Law Code § 2782(e) Subdivision (d) does not prohibit a subcontractor and builder or general contractor from mutually agreeing to the timing or immediacy of the defense and provisions for reimbursement of defense fees and costs, so long as that agreement does not waive or modify the provisions of subdivision (d) subject, however, to paragraphs (1) and (2). A subcontractor shall owe no defense or indemnity obligation to a builder or general contractor for a construction defect claim unless and until the builder or general contractor provides a written tender of the claim, or portion thereof, to the subcontractor which includes all of the information provided to the builder or general contractor by the claimant or claimants, including, but not limited to, information provided pursuant to subdivision (a) of Section 910, relating to claims caused by that subcontractor’s scope of work. This written tender shall have the same force and effect as a notice of commencement of a legal proceeding. If a builder or general contractor tenders a claim for construction defects, or a portion thereof, to a subcontractor in the manner specified by this provision, the subcontractor shall elect to perform either of the following, the performance of which shall be deemed to satisfy the subcontractor’s defense obligation to the builder or general contractor:
(1)CA Civil Law Code § 2782(e)(1) Defend the claim with counsel of its choice, and the subcontractor shall maintain control of the defense for any claim or portion of claim to which the defense obligation applies. If a subcontractor elects to defend under this paragraph, the subcontractor shall provide written notice of the election to the builder or general contractor within a reasonable time period following receipt of the written tender, and in no event later than 90 days following that receipt. Consistent with subdivision (d), the defense by the subcontractor shall be a complete defense of the builder or general contractor of all claims or portions thereof to the extent alleged to be caused by the subcontractor, including any vicarious liability claims against the builder or general contractor resulting from the subcontractor’s scope of work, but not including claims resulting from the scope of work, actions, or omissions of the builder, general contractor, or any other party. Any vicarious liability imposed upon a builder or general contractor for claims caused by the subcontractor electing to defend under this paragraph shall be directly enforceable against the subcontractor by the builder, general contractor, or claimant.
(2)CA Civil Law Code § 2782(e)(2) Pay, within 30 days of receipt of an invoice from the builder or general contractor, no more than a reasonable allocated share of the builder’s or general contractor’s defense fees and costs, on an ongoing basis during the pendency of the claim, subject to reallocation consistent with subdivision (d), and including any amounts reallocated upon final resolution of the claim, either by settlement or judgment. The builder or general contractor shall allocate a share to itself to the extent a claim or claims are alleged to be caused by its work, actions, or omissions, and a share to each subcontractor to the extent a claim or claims are alleged to be caused by the subcontractor’s work, actions, or omissions, regardless of whether the builder or general contractor actually tenders the claim to any particular subcontractor, and regardless of whether that subcontractor is participating in the defense. Any amounts not collected from any particular subcontractor may not be collected from any other subcontractor.
(f)CA Civil Law Code § 2782(f) Notwithstanding any other provision of law, if a subcontractor fails to timely and adequately perform its obligations under paragraph (1) of subdivision (e), the builder or general contractor shall have the right to pursue a claim against the subcontractor for any resulting compensatory damages, consequential damages, and reasonable attorney’s fees. If a subcontractor fails to timely perform its obligations under paragraph (2) of subdivision (e), the builder or general contractor shall have the right to pursue a claim against the subcontractor for any resulting compensatory and consequential damages, as well as for interest on defense and indemnity costs, from the date incurred, at the rate set forth in subdivision (g) of Section 3260, and for the builder’s or general contractor’s reasonable attorney’s fees incurred to recover these amounts. The builder or general contractor shall bear the burden of proof to establish both the subcontractor’s failure to perform under either paragraph (1) or (2) of subdivision (e) and any resulting damages. If, upon request by a subcontractor, a builder or general contractor does not reallocate defense fees to subcontractors within 30 days following final resolution of the claim as described above, the subcontractor shall have the right to pursue a claim against the builder or general contractor for any resulting compensatory and consequential damages, as well as for interest on the fees, from the date of final resolution of the claim, at the rate set forth in subdivision (g) of Section 3260, and the subcontractor’s reasonable attorney’s fees incurred in connection therewith. The subcontractor shall bear the burden of proof to establish both the failure to reallocate the fees and any resulting damages. Nothing in this section shall prohibit the parties from mutually agreeing to reasonable contractual provisions for damages if any party fails to elect for or perform its obligations as stated in this section.
(g)CA Civil Law Code § 2782(g) A builder, general contractor, or subcontractor shall have the right to seek equitable indemnity for any claim governed by this section.
(h)CA Civil Law Code § 2782(h) Nothing in this section limits, restricts, or prohibits the right of a builder, general contractor, or subcontractor to seek equitable indemnity against any supplier, design professional, or product manufacturer.
(i)CA Civil Law Code § 2782(i) As used in this section, “construction defect” means a violation of the standards set forth in Sections 896 and 897.

Section § 2782.1

Explanation

This law says a contractor working on a construction project can agree to protect someone else, like a company or property owner, from any problems that might arise when allowing the contractor onto their property, even though the construction isn't for them.

Nothing contained in Section 2782 shall prevent a contractor responsible for the performance of a construction contract, as defined in Section 2783, from indemnifying fully a person, firm, corporation, state or other agency for whose account the construction contract is not being performed but who, as an accommodation, enters into an agreement with the contractor permitting such contractor to enter upon or adjacent to its property for the purpose of performing such construction contract for others.

Section § 2782.2

Explanation

This law allows an agreement to indemnify, or protect, professional engineers from liability for their negligence when they provide inspection services at plants or facilities, but certain conditions must be met. The plant owner must be the one making this promise, and they must be financially stable, with an annual audit showing a net worth over $10 million. They need to be self-insured, and the indemnity doesn't cover the first $250,000 of any liability. Importantly, indemnity for willful misconduct is not allowed.

(a)CA Civil Law Code § 2782.2(a) Nothing contained in subdivision (a) of Section 2782 prevents an agreement to indemnify a professional engineer against liability for the negligence of the engineer, or the engineer’s agents or employees, in providing inspection services to plants or other facilities if all the following criteria are satisfied:
(1)CA Civil Law Code § 2782.2(a)(1) The promisor is the owner of the plants or facilities inspected.
(2)CA Civil Law Code § 2782.2(a)(2) The promisor is audited annually by an independent certified public accountant, public accountant, or accounting licentiate of another state authorized by the laws of that state to perform the audit.
(3)CA Civil Law Code § 2782.2(a)(3) The net worth of the promisor exceeds ten million dollars ($10,000,000), as determined by the promisor’s most recent annual independent audit. The requirement of this paragraph shall be satisfied at the time the contract for indemnification is entered, and a subsequent reduction of the promisor’s net worth shall not void the obligation to indemnify.
(4)CA Civil Law Code § 2782.2(a)(4) The promisor is self-insured with respect to liability arising from ownership of the plant or facility.
(5)CA Civil Law Code § 2782.2(a)(5) The indemnification shall not be applicable to the first two hundred fifty thousand dollars ($250,000) of liability.
(b)CA Civil Law Code § 2782.2(b) Subdivision (a) does not authorize contracts for indemnification of liability arising from willful misconduct.

Section § 2782.05

Explanation

This law makes certain parts of construction contracts invalid if they try to make subcontractors cover problems that are the fault of general contractors, construction managers, or others responsible. It affects contracts from 2013 onwards. It outlines when subcontractors can be asked to defend a claim and how costs for this defense get shared. Some types of contracts and insurance policies aren't affected by this law, like residential construction contracts and insurance that is required by certain contracts. California law must apply to these contracts, and any attempt to waive the law's requirements is void. Contractors and subcontractors can negotiate some terms like the timing of defense costs but can't change the fundamental protections the law provides.

(a)CA Civil Law Code § 2782.05(a) Except as provided in subdivision (b), provisions, clauses, covenants, and agreements contained in, collateral to, or affecting any construction contract and amendments thereto entered into on or after January 1, 2013, that purport to insure or indemnify, including the cost to defend, a general contractor, construction manager, or other subcontractor, by a subcontractor against liability for claims of death or bodily injury to persons, injury to property, or any other loss, damage, or expense are void and unenforceable to the extent the claims arise out of, pertain to, or relate to the active negligence or willful misconduct of that general contractor, construction manager, or other subcontractor, or their other agents, other servants, or other independent contractors who are responsible to the general contractor, construction manager, or other subcontractor, or for defects in design furnished by those persons, or to the extent the claims do not arise out of the scope of work of the subcontractor pursuant to the construction contract. This section shall not be waived or modified by contractual agreement, act, or omission of the parties. Contractual provisions, clauses, covenants, or agreements not expressly prohibited herein are reserved to the agreement of the parties. This section shall not affect the obligations of an insurance carrier under the holding of Presley Homes, Inc. v. American States Insurance Company (2001) 90 Cal.App.4th 571, nor the rights of an insurance carrier under the holding of Buss v. Superior Court (1997) 16 Cal.4th 35.
(b)CA Civil Law Code § 2782.05(b) This section does not apply to:
(1)CA Civil Law Code § 2782.05(b)(1) Contracts for residential construction that are subject to any part of Title 7 (commencing with Section 895) of Part 2 of Division 2.
(2)CA Civil Law Code § 2782.05(b)(2) Direct contracts with a public agency that are governed by subdivision (b) of Section 2782.
(3)CA Civil Law Code § 2782.05(b)(3) Direct contracts with the owner of privately owned real property to be improved that are governed by subdivision (c) of Section 2782.
(4)CA Civil Law Code § 2782.05(b)(4) Any wrap-up insurance policy or program.
(5)CA Civil Law Code § 2782.05(b)(5) A cause of action for breach of contract or warranty that exists independently of an indemnity obligation.
(6)CA Civil Law Code § 2782.05(b)(6) A provision in a construction contract that requires the promisor to purchase or maintain insurance covering the acts or omissions of the promisor, including additional insurance endorsements covering the acts or omissions of the promisor during ongoing and completed operations.
(7)CA Civil Law Code § 2782.05(b)(7) Indemnity provisions contained in loan and financing documents, other than construction contracts to which the contractor and a contracting project owner’s lender are parties.
(8)CA Civil Law Code § 2782.05(b)(8) General agreements of indemnity required by sureties as a condition of execution of bonds for construction contracts.
(9)CA Civil Law Code § 2782.05(b)(9) The benefits and protections provided by the workers’ compensation laws.
(10)CA Civil Law Code § 2782.05(b)(10) The benefits or protections provided by the governmental immunity laws.
(11)CA Civil Law Code § 2782.05(b)(11) Provisions that require the purchase of any of the following:
(A)CA Civil Law Code § 2782.05(b)(11)(A) Owners and contractors protective liability insurance.
(B)CA Civil Law Code § 2782.05(b)(11)(B) Railroad protective liability insurance.
(C)CA Civil Law Code § 2782.05(b)(11)(C) Contractors all-risk insurance.
(D)CA Civil Law Code § 2782.05(b)(11)(D) Builders all-risk or named perils property insurance.
(12)CA Civil Law Code § 2782.05(b)(12) Contracts with design professionals.
(13)CA Civil Law Code § 2782.05(b)(13) Any agreement between a promisor and an admitted surety insurer regarding the promisor’s obligations as a principal or indemnitor on a bond.
(c)CA Civil Law Code § 2782.05(c) Notwithstanding any choice-of-law rules that would apply the laws of another jurisdiction, the law of California shall apply to every contract to which this section applies.
(d)CA Civil Law Code § 2782.05(d) Any waiver of the provisions of this section is contrary to public policy and is void and unenforceable.
(e)CA Civil Law Code § 2782.05(e) Subdivision (a) does not prohibit a subcontractor and a general contractor or construction manager from mutually agreeing to the timing or immediacy of the defense and provisions for reimbursement of defense fees and costs, so long as that agreement does not waive or modify the provisions of subdivision (a) subject, however, to paragraphs (1) and (2). A subcontractor shall owe no defense or indemnity obligation to a general contractor or construction manager for a claim unless and until the general contractor or construction manager provides a written tender of the claim, or portion thereof, to the subcontractor that includes the information provided by the claimant or claimants relating to claims caused by that subcontractor’s scope of work. In addition, the general contractor or construction manager shall provide a written statement regarding how the reasonable allocated share of fees and costs was determined. The written tender shall have the same force and effect as a notice of commencement of a legal proceeding. If a general contractor or construction manager tenders a claim, or portion thereof, to a subcontractor in the manner specified by this subdivision, the subcontractor shall elect to perform either of the following, the performance of which shall be deemed to satisfy the subcontractor’s defense obligation to the general contractor or construction manager:
(1)CA Civil Law Code § 2782.05(e)(1) Defend the claim with counsel of its choice, and the subcontractor shall maintain control of the defense for any claim or portion of claim to which the defense obligation applies. If a subcontractor elects to defend under this paragraph, the subcontractor shall provide written notice of the election to the general contractor or construction manager within a reasonable time period following receipt of the written tender, and in no event later than 30 days following that receipt. Consistent with subdivision (a), the defense by the subcontractor shall be a complete defense of the general contractor or construction manager of all claims or portions thereof to the extent alleged to be caused by the subcontractor, including any vicarious liability claims against the general contractor or construction manager resulting from the subcontractor’s scope of work, but not including claims resulting from the scope of work, actions, or omissions of the general contractor or construction manager, or any other party. Any vicarious liability imposed upon a general contractor or construction manager for claims caused by the subcontractor electing to defend under this paragraph shall be directly enforceable against the subcontractor by the general contractor, construction manager, or claimant. All information, documentation, or evidence, if any, relating to a subcontractor’s assertion that another party is responsible for the claim shall be provided by that subcontractor to the general contractor or construction manager that tendered the claim.
(2)CA Civil Law Code § 2782.05(e)(2) Pay, within 30 days of receipt of an invoice from the general contractor or construction manager, no more than a reasonable allocated share of the general contractor’s or construction manager’s defense fees and costs, on an ongoing basis during the pendency of the claim, subject to reallocation consistent with subdivision (a), and including any amounts reallocated upon final resolution of the claim, either by settlement or judgment. The general contractor or construction manager shall allocate a share to itself to the extent a claim or claims are alleged to be caused by its work, actions, or omissions, and a share to each subcontractor to the extent a claim or claims are alleged to be caused by the subcontractor’s work, actions, or omissions, regardless of whether the general contractor or construction manager actually tenders the claim to any particular subcontractor, and regardless of whether that subcontractor is participating in the defense. Any amounts not collected from any particular subcontractor may not be collected from any other subcontractor.
(f)CA Civil Law Code § 2782.05(f) Notwithstanding any other provision of law, if a subcontractor fails to timely and adequately perform its obligations under paragraph (1) of subdivision (e), the general contractor or construction manager shall have the right to pursue a claim against the subcontractor for any resulting compensatory damages, consequential damages, and reasonable attorney’s fees. If a subcontractor fails to timely perform its obligations under paragraph (2) of subdivision (e), the general contractor or construction manager shall have the right to pursue a claim against the subcontractor for any resulting compensatory damages, interest on defense and indemnity costs, from the date incurred, at the rate set forth in subdivision (g) of Section 3260, consequential damages, and reasonable attorney’s fees incurred to recover these amounts. The general contractor or construction manager shall bear the burden of proof to establish both the subcontractor’s failure to perform under either paragraph (1) or (2) of subdivision (e) and any resulting damages. If, upon request by a subcontractor, a general contractor or construction manager does not reallocate defense fees to subcontractors within 30 days following final resolution of the claim, the subcontractor shall have the right to pursue a claim against the general contractor or construction manager for any resulting compensatory damages with interest, from the date of final resolution of the claim, at the rate set forth in subdivision (g) of Section 3260. The subcontractor shall bear the burden of proof to establish both the failure to reallocate the fees and any resulting damages. Nothing in this section shall prohibit the parties from mutually agreeing to reasonable contractual provisions for damages if any party fails to elect for or perform its obligations as stated in this section.
(g)CA Civil Law Code § 2782.05(g) For purposes of this section, “construction manager” means a person or entity, other than a public agency or owner of privately owned real property to be improved, who is contracted by a public agency or the owner of privately owned real property to be improved to direct, schedule, or coordinate the work of contractors for a work of improvement, but does not itself perform the work.
(h)CA Civil Law Code § 2782.05(h) For purposes of this section, “general contractor,” in relation to a given subcontractor, means a person who has entered into a construction contract and who has entered into a subcontract with that subcontractor under which the subcontractor agrees to perform a portion of that scope of work. Where a subcontractor has itself subcontracted a portion of its work, that subcontractor, along with its general contractor, shall be considered a general contractor as to its subcontractors.
(i)CA Civil Law Code § 2782.05(i) For purposes of this section, “subcontractor” means a person who has entered into a construction contract either with a contractor to perform a portion of that contractor’s work under a construction contract or with any person to perform a construction contract subject to the direction or control of a general contractor or construction manager.
(j)CA Civil Law Code § 2782.05(j) A general contractor, construction manager, or subcontractor shall have the right to seek equitable indemnity for any claim governed by this section.
(k)CA Civil Law Code § 2782.05(k) Nothing in this section limits, restricts, or prohibits the right of a general contractor, construction manager, or subcontractor to seek equitable indemnity against any supplier, design professional, product manufacturer, or other independent contractor or subcontractor.
(l)CA Civil Law Code § 2782.05(l) This section shall not affect the validity of any existing insurance contract or agreement, including, but not limited to, a contract or agreement for workers’ compensation or an agreement issued on or before January 1, 2012, by an admitted insurer, as defined in the Insurance Code.
(m)CA Civil Law Code § 2782.05(m) Nothing in this section shall be construed to affect the obligation, if any, of either a contractor or construction manager to indemnify, including defending or paying the costs to defend, a public agency against any claim arising from the alleged active negligence of the public agency under subdivision (b) of Section 2782 or to indemnify, including defending or paying the costs to defend, an owner of privately owned real property to be improved against any claim arising from the alleged active negligence of the owner under subdivision (c) of Section 2782.
(n)CA Civil Law Code § 2782.05(n) Nothing in this section shall be construed to affect the obligation, if any, of either a contractor or construction manager to provide or maintain insurance covering the acts or omissions of the promisor, including additional insurance endorsements covering the acts or omissions of the promisor during ongoing and completed operations pursuant to a construction contract with a public agency under subdivision (b) of Section 2782 or an owner of privately owned real property to be improved under subdivision (c) of Section 2782.

Section § 2782.5

Explanation

This law allows the parties involved in a construction contract to negotiate and agree on how they will handle responsibility for problems. Specifically, they can decide among themselves who takes the blame for design defects or issues related to the promises made in the contract.

Nothing contained in Section 2782 shall prevent a party to a construction contract and the owner or other party for whose account the construction contract is being performed from negotiating and expressly agreeing with respect to the allocation, release, liquidation, exclusion, or limitation as between the parties of any liability (a) for design defects, or (b) of the promisee to the promisor arising out of or relating to the construction contract.

Section § 2782.6

Explanation

This law allows engineers or geologists to be indemnified, or protected from liability, in certain cases when dealing with hazardous materials. The indemnity is valid when the work focuses on underground contamination or hidden hazards, and the person requesting the indemnity is responsible for the contamination. However, this protection does not cover the first $250,000 in damages and doesn't apply if there has been gross negligence or intentional wrongdoing. The term 'hazardous materials' encompasses a wide range of substances, like toxic chemicals, petroleum, and asbestos, regulated by state or federal law. Importantly, this law doesn’t apply to public entities and doesn’t change the liability for death, injury, or property damage to other people.

(a)CA Civil Law Code § 2782.6(a) Nothing in subdivision (a) of Section 2782 prevents an agreement to indemnify a professional engineer or geologist or the agents, servants, independent contractors, subsidiaries, or employees of that engineer or geologist from liability as described in Section 2782 in providing hazardous materials identification, evaluation, preliminary assessment, design, remediation services, or other services of the types described in Sections 78125 and 78135 of the Health and Safety Code or the federal National Oil and Hazardous Substances Pollution Contingency Plan (40 C.F.R. Sec. 300.1 et seq.), if all of the following criteria are satisfied:
(1)CA Civil Law Code § 2782.6(a)(1) The services in whole or in part address subterranean contamination or other concealed conditions caused by the hazardous materials.
(2)CA Civil Law Code § 2782.6(a)(2) The promisor is responsible, or potentially responsible, for all or part of the contamination.
(b)CA Civil Law Code § 2782.6(b) The indemnification described in this section is valid only for damages arising from, or related to, subterranean contamination or concealed conditions, and is not applicable to the first two hundred fifty thousand dollars ($250,000) of liability or a greater amount as is agreed to by the parties.
(c)CA Civil Law Code § 2782.6(c) This section does not authorize contracts for indemnification, by promisors specified in paragraph (2) of subdivision (a), of any liability of a promisee arising from the gross negligence or willful misconduct of the promisee.
(d)CA Civil Law Code § 2782.6(d) “Hazardous materials,” as used in this section, means any hazardous or toxic substance, material, or waste that is or becomes subject to regulation by any agency of the state, any municipality or political subdivision of the state, or the United States. “Hazardous materials” includes, but is not limited to, any material or substance that is any of the following:
(1)CA Civil Law Code § 2782.6(d)(1) A hazardous substance, as defined in subdivision (a) of Section 78075 of the Health and Safety Code.
(2)CA Civil Law Code § 2782.6(d)(2) Hazardous material, as defined in subdivision (n) of Section 25501 of the Health and Safety Code.
(3)CA Civil Law Code § 2782.6(d)(3) A regulated substance, as defined in subdivision (i) of Section 25532 of the Health and Safety Code.
(4)CA Civil Law Code § 2782.6(d)(4) Hazardous waste, as defined in Section 25117 of the Health and Safety Code.
(5)CA Civil Law Code § 2782.6(d)(5) Extremely hazardous waste, as defined in Section 25115 of the Health and Safety Code.
(6)CA Civil Law Code § 2782.6(d)(6) Petroleum.
(7)CA Civil Law Code § 2782.6(d)(7) Asbestos.
(8)CA Civil Law Code § 2782.6(d)(8) Designated as a hazardous substance for purposes of Section 311 of the Federal Water Pollution Control Act, as amended (33 U.S.C. Sec. 1321).
(9)CA Civil Law Code § 2782.6(d)(9) Hazardous waste, as defined by subsection (5) of Section 1004 of the federal Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Sec. 6903).
(10)CA Civil Law Code § 2782.6(d)(10) A hazardous substance, as defined by subsection (14) of Section 101 of the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sec. 9601).
(11)CA Civil Law Code § 2782.6(d)(11) A regulated substance, as defined by subsection (7) of Section 9001 of the federal Solid Waste Disposal Act, as amended (42 U.S.C. Sec. 6991).
(e)CA Civil Law Code § 2782.6(e) Nothing in this section shall be construed to alter, modify, or otherwise affect the liability of the promisor or promisee, under an indemnity agreement meeting the criteria of this section, to third parties for damages for death or bodily injury to persons, injury to property, or any other loss, damage, or expense.
(f)CA Civil Law Code § 2782.6(f) This section does not apply to public entities, as defined by Section 811.2 of the Government Code.

Section § 2782.8

Explanation

This law, effective from January 1, 2018, states that when a design professional, like an architect or engineer, signs a contract, they cannot be required to cover legal defense costs for claims against the other party unless the claims are due to their own negligence or misconduct. Even then, the cost they must pay is limited to their share of the fault. The law also ensures these protections cannot be changed by agreement. Contracts must automatically include these terms. However, it doesn't apply if the project has a general liability policy covering everyone or in joint ventures. Importantly, state agencies aren't included in these protections.

(a)CA Civil Law Code § 2782.8(a) For all contracts, and amendments thereto, entered into on or after January 1, 2018, for design professional services, all provisions, clauses, covenants, and agreements contained in, collateral to, or affecting any such contract, and amendments thereto, that purport to indemnify, including the duty and the cost to defend, the indemnitee by a design professional against liability for claims against the indemnitee, are unenforceable, except to the extent that the claims against the indemnitee arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional. In no event shall the cost to defend charged to the design professional exceed the design professional’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, the design professional shall meet and confer with other parties regarding unpaid defense costs. The duty to indemnify, including the duty and the cost to defend, is limited as provided in this section. This section shall not be waived or modified by contractual agreement, act, or omission of the parties. Contractual provisions, clauses, covenants, or agreements not expressly prohibited herein are reserved to the agreement of the parties.
(b)CA Civil Law Code § 2782.8(b) All contracts and all solicitation documents, including requests for proposal, invitations for bid, and other solicitation documents for design professional services are deemed to incorporate by reference the provisions of this section.
(c)CA Civil Law Code § 2782.8(c) For purposes of this section, “design professional” includes all of the following:
(1)CA Civil Law Code § 2782.8(c)(1) An individual licensed as an architect pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of the Business and Professions Code, and a business entity offering architectural services in accordance with that chapter.
(2)CA Civil Law Code § 2782.8(c)(2) An individual licensed as a landscape architect pursuant to Chapter 3.5 (commencing with Section 5615) of Division 3 of the Business and Professions Code, and a business entity offering landscape architectural services in accordance with that chapter.
(3)CA Civil Law Code § 2782.8(c)(3) An individual registered as a professional engineer pursuant to Chapter 7 (commencing with Section 6700) of Division 3 of the Business and Professions Code, and a business entity offering professional engineering services in accordance with that chapter.
(4)CA Civil Law Code § 2782.8(c)(4) An individual licensed as a professional land surveyor pursuant to Chapter 15 (commencing with Section 8700) of Division 3 of the Business and Professions Code, and a business entity offering professional land surveying services in accordance with that chapter.
(d)CA Civil Law Code § 2782.8(d) This section shall apply only to a professional service contract, or any amendment thereto, entered into on or after January 1, 2018.
(e)CA Civil Law Code § 2782.8(e) The provisions of this section pertaining to the duty and cost to defend shall not apply to either of the following:
(1)CA Civil Law Code § 2782.8(e)(1) Any contract for design professional services, or amendments thereto, where a project-specific general liability policy insures all project participants for general liability exposures on a primary basis and also covers all design professionals for their legal liability arising out of their professional services on a primary basis.
(2)CA Civil Law Code § 2782.8(e)(2) A design professional who is a party to a written design-build joint venture agreement.
(f)CA Civil Law Code § 2782.8(f) Nothing in this section shall abrogate the provisions of Section 1104 of the Public Contract Code.
(g)CA Civil Law Code § 2782.8(g) Indemnitee, for purposes of this section, does not include any agency of the state.

Section § 2782.9

Explanation

If a residential construction project uses a wrap-up insurance policy, any contract clauses requiring subcontractors to cover claims that the insurance already covers are not valid. If these clauses are invalid, parties can still seek 'equitable indemnity,' meaning they may ask others to help pay for a claim unless the insurance covers it. Builders can request subcontractors to contribute to a deductible but must clearly outline this in the contract. The amount a subcontractor pays should be fair and relate to any issues they are alleged to cause. Builders must notify subcontractors in writing of any required payments, and the total collected can't exceed the deductible. Parties can't change or ignore this law by agreement.

(a)CA Civil Law Code § 2782.9(a) All contracts, provisions, clauses, amendments, or agreements contained therein entered into after January 1, 2009, for a residential construction project on which a wrap-up insurance policy, as defined in subdivision (b) of Section 11751.82 of the Insurance Code, or other consolidated insurance program, is applicable, that require an enrolled and participating subcontractor or other participant to indemnify, hold harmless, or defend another for any claim or action covered by that program, arising out of that project are unenforceable.
(b)CA Civil Law Code § 2782.9(b) To the extent any contractual provision is deemed unenforceable pursuant to this section, any party may pursue an equitable indemnity claim against another party for a claim or action unless there is coverage for the claim or action under the wrap-up policy or policies. Nothing in this section shall prohibit a builder or general contractor from requiring a reasonably allocated contribution from a subcontractor or other participant to the self-insured retention or deductible required under the wrap-up policy or other consolidated insurance program, if the maximum amount and method of collection of the participant’s contribution is disclosed in the contract with the participant and the contribution is reasonably limited so that each participant may have some financial obligation in the event of a claim alleged to be caused by that participant’s scope of work. The contribution shall only be collected when and as any such self-insured retention or deductible is incurred by the builder or general contractor and in an amount that bears a reasonable and proportionate relationship to the alleged liability arising from the claim or claims alleged to be caused by the participant’s scope of work, when viewed in the context of the entirety of the alleged claim or claims. Any contribution shall only be collected from a participant after written notice to the participant of the amount of and basis for the contribution. In no event shall the total amount of contributions collected from participants exceed the amount of any self-insured retention or deductible due and payable by the builder or general contractor for the claim or claims. However, this requirement does not prohibit any legally permissible recovery of costs and legal fees to collect a participant’s contribution if the contribution satisfies the requirements of this subdivision and is not paid by the participant when due.
(c)CA Civil Law Code § 2782.9(c) This section shall not be waived or modified by contractual agreement, act, or omission of the parties.

Section § 2782.95

Explanation

This law deals with wrap-up insurance policies for private residential construction projects that started after January 1, 2009. The owner, builder, or contractor must clearly disclose any insurance premium credits or costs that subcontractors must pay in the contract. They also need to share details about the insurance policy, such as limits, coverage, and terms, and provide estimated available insurance limits. Subcontractors have the right to see the actual policy or insurance binder, and those who receive such documents have limitations on sharing them. If a subcontractor wasn't told about specific insurance cost details before bidding, they are allowed to adjust their bid regarding those costs.

For any wrap-up insurance policy or other consolidated insurance program that insures a private residential (as that term is used in Title 7 (commencing with Section 895) of Part 2 of Division 2) work of improvement that first commences construction after January 1, 2009, the following shall apply:
(a)CA Civil Law Code § 2782.95(a) The owner, builder, or general contractor obtaining the wrap-up insurance policy or other consolidated insurance program shall disclose the total amount or method of calculation of any credit or compensation for premium required from a subcontractor or other participant for that wrap-up policy in the contract documents.
(b)CA Civil Law Code § 2782.95(b) The contract documents shall disclose, if and to the extent known:
(1)CA Civil Law Code § 2782.95(b)(1) The policy limits.
(2)CA Civil Law Code § 2782.95(b)(2) The scope of policy coverage.
(3)CA Civil Law Code § 2782.95(b)(3) The policy term.
(4)CA Civil Law Code § 2782.95(b)(4) The basis upon which the deductible or occurrence is triggered by the insurance carrier.
(5)CA Civil Law Code § 2782.95(b)(5) If the policy covers more than one work of improvement, the number of units, if any, indicated on the application for the insurance policy.
(6)CA Civil Law Code § 2782.95(b)(6) A good faith estimate of the amount of available limits remaining under the policy as of a date indicated in the disclosure obtained from the insurer.
(7)CA Civil Law Code § 2782.95(b)(7) Disclosures made pursuant to paragraphs (5) and (6) are recognized to be based upon information at a given moment in time and may not accurately reflect the actual number of units covered by the policy nor the amount of insurance available, if any, when a later claim is made. These disclosures are presumptively made in good faith if the disclosure pursuant to paragraph (5) is the same as that contained in the application to the wrap-up insurer and the disclosure pursuant to paragraph (6) was obtained from the wrap-up insurer or broker. The presumptions stated above shall be overcome only by a showing that the insurer, broker, builder, or general contractor intentionally misrepresented the facts identified in paragraphs (5) or (6).
(c)CA Civil Law Code § 2782.95(c) Upon the written request of any participant, a copy of the insurance policy shall be provided, if available, that shows the coverage terms and items in paragraphs (1) to (4), inclusive, of subdivision (b) above. If the policy is not available at the time of the request, a copy of the insurance binder or declaration of coverage may be provided in lieu of the actual policy. Paragraphs (1) to (4), inclusive, of subdivision (b) may be satisfied by providing the participant with a copy of the binder or declaration. Any party receiving a copy of the policy, binder, or declaration shall not disclose it to third parties other than the participant’s insurance broker or attorney unless required to do so by law. The participant’s insurance broker or attorney may not disclose the policy, binder, or declaration to any third party unless required to do so by law.
(d)CA Civil Law Code § 2782.95(d) If the owner, builder, or general contractor obtaining the wrap-up insurance policy or other consolidated insurance program does not disclose the total amount or method of calculation of the premium credit or compensation to be charged to the participant prior to the time the participant submits its bid, the participant shall not be legally bound by the bid unless that participant has the right to increase the bid up to the amount equal to the difference between the amount the participant included, if any, for insurance in the original bid and the amount of the actual bid credit required by the owner, builder, or general contractor obtaining the wrap-up insurance policy or other consolidated insurance program. This subdivision shall not apply if the owner, builder, or general contractor obtaining the wrap-up insurance policy or other consolidated insurance program did not require the subcontractor to offset the original bid amount with a deduction for the wrap-up insurance policy or program.

Section § 2782.96

Explanation

If a public work project, or any non-residential project, is using a wrap-up insurance policy, there are certain rules to follow. If subcontractors have to pay part of the insurance premium, this cost must be clearly outlined in the bid documents. Information about the policy, like coverage limits and exclusions, must be shared with those covered by the policy. However, if no additional cost is passed on to subcontractors, these disclosure rules don't apply. Also, anyone privy to the insurance details must keep it confidential unless legally obligated to share it.

If an owner, builder, or general contractor obtains a wrap-up insurance policy or other consolidated insurance program for a public work as defined in Section 1720 of the Labor Code or any other project other than residential construction, as that term is used in Title 7 (commencing with Section 895) of Part 2 of Division 2, that is put out for bid after January 1, 2009, the following shall apply:
(a)CA Civil Law Code § 2782.96(a) The total amount or method of calculation of any credit or compensation for premium required from a subcontractor or other participant for that policy shall be clearly delineated in the bid documents.
(b)CA Civil Law Code § 2782.96(b) The named insured, to the extent known, shall disclose to the subcontractor or other participant in the contract documents the policy limits, known exclusions, and the length of time the policy is intended to remain in effect. In addition, upon written request, once available, the named insured shall provide copies of insurance policies to all those who are covered by the policy. Until such time as the policies are available, the named insured may also satisfy the disclosure requirements of this subdivision by providing the subcontractor or other participant with a copy of the insurance binder or declaration of coverage. Any party receiving a copy of the policy, binder, or declaration shall not disclose it to third parties other than the participant’s insurance broker or attorney unless required to do so by law. The participant’s insurance broker or attorney may not disclose the policy, binder, or declaration to any third party unless required to do so by law.
(c)CA Civil Law Code § 2782.96(c) The disclosure requirements in subdivisions (a) and (b) do not apply to an insurance policy purchased by an owner, builder, or general contractor that provides additional coverage beyond what was contained in the original wrap-up policy or other consolidated insurance program if no credit or compensation for premium is required of the subcontractor for the additional insurance policy.

Section § 2783

Explanation

This section clarifies what a 'construction contract' includes for certain California laws. It covers any deal, whether written or spoken, about building or changing structures or infrastructure like buildings, roads, or utilities. It also includes related activities like equipment rental and services such as surveying, design, demolition, or maintenance.

As used in Sections 2782 and 2782.5, “construction contract” is defined as any agreement or understanding, written or oral, respecting the construction, surveying, design, specifications, alteration, repair, improvement, renovation, maintenance, removal of or demolition of any building, highway, road, parking facility, bridge, water line, sewer line, oil line, gas line, electric utility transmission or distribution line, railroad, airport, pier or dock, excavation or other structure, appurtenance, development or other improvement to real or personal property, or an agreement to perform any portion thereof or any act collateral thereto, or to perform any service reasonably related thereto, including, but not limited to, the erection of all structures or performance of work in connection therewith, electrical power line clearing, tree trimming, vegetation maintenance, the rental of all equipment, all incidental transportation, moving, lifting, crane and rigging service and other goods and services furnished in connection therewith.

Section § 2784

Explanation

This law section explains what a 'design defect' means. It is a problem that occurs because of how something is planned or designed, making a building, machine, or equipment unsafe or unsuitable for its intended purpose, even if it is built according to the design.

As used in Sections 2782 and 2782.5, a “design defect” is defined as a condition arising out of its design which renders a structure, item of equipment or machinery or any other similar object, movable or immovable, when constructed substantially in accordance with its design, inherently unfit, either wholly or in part, for its intended use or which impairs or renders the use of such structure, equipment, machinery or property dangerous.

Section § 2784.5

Explanation

This law says that in any trucking or hauling contract, you can't promise to cover someone's costs if they are found completely at fault for causing injury, death, or property damage because of their negligence or intentional bad actions. However, this rule doesn't apply if insurance agreements or workers' compensation insurance are involved. Basically, you're on your own if you're the one at fault, unless insurance steps in.

Any provision, promise, agreement, clause, or covenant contained in, collateral to, or affecting any hauling, trucking, or cartage contract or agreement is against public policy, void and unenforceable if it purports to indemnify the promisee against liability for any of the following damages which are caused by the sole negligence or willful misconduct of the promisee, agents, servants, or the independent contractors directly responsible to the promisee, except when such agents, servants, or independent contractors are under the direct supervision and control of the promisor:
(a)CA Civil Law Code § 2784.5(a) Damages arising out of bodily injury or death to persons.
(b)CA Civil Law Code § 2784.5(b) Damage to property.
(c)CA Civil Law Code § 2784.5(c) Any other damage or expense arising under either (a) or (b).
This section shall not affect the validity of any insurance contract, workmen’s compensation insurance contract, or agreement issued by an admitted insurer as defined by Sections 23 and 24 of the Insurance Code or insurance effected by surplus line brokers under Sections 1760 through 1780 of the Insurance Code.