Legal Memorandum: Contract Exempting Owners and Contractors from Liability

Issue: Under New York law, when should a court find a contract clause is invalid under N.Y. Gen. Oblig. Law 5-322.1?

Area of Law: Business Organizations & Contracts, Personal Injury & Negligence
Keywords: Contract exempting owners and contractors from liability; Void and unenforceable as a matter of law; Negligence
Jurisdiction: New York
Cited Cases: 680 N.E.2d 1200; 556 N.E.2d 430; 89 N.Y.2d 786; 560 N.Y.S.2d 30; 556 N.Y.S.2d 991; 78 N.Y.2d 433; 581 N.Y.S.2d 639; 507 N.E.2d 294; 583 N.Y.S.2d 596; 435 N.Y.S.2d 212; 179 A.D.2d 1; 514 N.Y.S.2d 701; 590 N.E.2d 224; 634 N.Y.S.2d 592; 582 N.E.2d 586; 562 N.Y.S.2d 718; 641 N.Y.S.2d 20; 604 N.Y.S.2d 432; 658 N.Y.S.2d 903
Cited Statutes: N.Y. Gen. Oblig. Law 5-322.1
Date: 05/01/2000

           New York General Obligation Law § 5-322.1 precludes owners and contractors from passing construction-related liability, resulting from their own negligence, onto their subcontractors.  Under § 5-322.1, contract provisions exempting owners and contractors from liability for their own negligence are void and unenforceable as a matter of law.  Numerous cases specify whether § 5- 322.1 applies and its impact if applicable.

First, where the indemnified owner or contractor is not at all liable (aside from any vicarious liability imposed by labor statutes), N.Y. Gen. Oblig. Law § 5-322.1 is not applicable, and, the owner or contractor can proceed to be indemnified under the contract or under common-law principles.  Cases on point include: 

·         Connolly v. Brooklyn Union Gas Co., 168 A.D.2d 477, 562 N.Y.S.2d 718 (2d Dep’t 1990) (contractor must demonstrate owner was negligent in whole or part before indemnity provision can be rendered void or unenforceable by N.Y. Gen. Oblig. Law § 5-322.1).


·         Brown v. Two Exchange Plaza Partners, 76 N.Y.2d 172, […]

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