Updated November 18, 2020:

A hold harmless agreement NC is a legal agreement in which one party promises not to hold the other party liable for any potential damage or injury.

What Is Indemnity?

An indemnity is a statement that you agree to pay any amount which someone else might be legally bound to pay. It can often prove to be a costly item.

Usually, indemnity provisions are part of a contract and are governed by contract rules. For instance, if you have agreed to pay for the builder's liabilities to others, you may be legally held liable to pay them.

In North Carolina, the applicability of indemnity provisions is subject to certain exceptions. For instance, you cannot claim indemnity against your own negligence. If an indemnity clause in a contract seeks to indemnify a party against its own negligence, such provision would be against public policy, and North Carolina state law prohibits such indemnification.

According to Chapter 22B-1 of North Carolina General Statutes, any agreement related to design, construction, repair, demolition, excavation, maintenance, etc. that promises to indemnify the promisee (or its agents, employees, contractors, etc.) against any liability arising from injury or damage resulting from partial or complete negligence the promisee (or its agents, employees, contractors, etc.) is against public policy, and hence, void and unenforceable. However, this restriction does not apply to agreements where the promisor agrees to indemnify the promisee against the liability for damages arising out of sole negligence of the promisor.

Further, if an invalid portion of a construction indemnity clause can be separated from the main agreement, the rest of the agreement will continue to remain valid and enforceable.

All indemnity provisions are not the same. Some of them may also include attorney fees as part of the indemnified liability, while others may expressly exclude such expenses. Similarly, some provisions may include a duty to defend the promisee, while others may remain silent on this issue. The language of an indemnity provision is extremely important and you should discuss it with your construction lawyer.

Effectiveness of a Hold Harmless Agreement

The effectiveness of a hold harmless agreement depends upon the language of the agreement and the circumstances of the case. Even if the agreement may not protect you against all types of potential injuries, there might be a benefit attached to it. Let's say for instance you are a homeowner, and you have got your liability for an injury covered under an indemnity agreement. You will still be under an obligation to provide a safe workplace.

Note that a hold harmless agreement is different from a waiver of liability, which depends upon whether you have any control over the work.

Negotiating an Indemnity, Hold Harmless, or Assumption of Liability Clause

To completely remove an indemnity or a hold harmless clause, you can state in the agreement that the state of North Carolina prohibits contract provisions that seek to limit the liability of the other party. You may want to mention the North Carolina Tort Claims Act under which a state entity is prohibited from waiving its sovereign immunity except under certain circumstances.

If you cannot negotiate a clause on the above lines, the other way around is to limit the indemnity clause by adding something like “only to the extent and manner provided by North Carolina law.” However, this approach is less favored than the above one.

Hold Harmless Agreement Sample

This is a Hold Harmless Agreement between ____________________ (the name of the promisor) and _______________ (the name of the promisee) for use of items bought from donations, such as wheelbarrows, ladders, leaf blowers, power washers, or some other item that may be used for personal use by _______________. These items may be used without any charges.

1. In consideration for the permission to use various items given to us, I release and waive ____________ (name of the promise), his agents or employees (hereinafter referred to as Releasees) from all claims, liabilities, and causes of action related to any damage, loss, or injury sustained from using such items.

2. I am fully aware of the risks associated with the use of the said items, and I am using such items voluntarily out of my free will. I assume full responsibility for any loss, damage, or injury sustained from the use of the said items.

3. This release agreement shall bind all my family members and legal heirs.

I acknowledge that I have read and understood the above agreement and am signing it out of my own free will.


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