Michigan Legislature Expands Scope of Construction Contract “Sole Negligence” Indemnity Limitation Statute

Michigan statute (MCL 669.991) provides that a provision in a contract for the construction, alteration, repair or maintenance of a building, structure or appurtenance that would cause the contractor to indemnify the owner against damages arising from bodily injury or damage to property caused by or resulting from the owner’s sole negligence, is against public policy and void and unenforceable.

Michigan Public Act 468 of 2012, effective March 1, 2013, amends MCL 669.991 by expanding the scope of this statute to:

• Cover design work;
• Extend to work on highways, roads, bridges, water lines, sewer lines, other infrastructure, and other improvements to real property; and
• Prohibit a “public entity” (e.g., State of Michigan and its agencies, any public body corporate within Michigan (including cities, villages, townships, counties, school districts, authorities, and community and junior colleges)) and its agencies, from requiring a Michigan-licensed architect, engineer, landscape architect or surveyor to defend the public entity or another party from liability claims, or to assume liability or indemnify the public entity or other party for any amount greater than the degree of fault of the Michigan-licensed architect, engineer, landscape architect or surveyor. [In an important caveat, Michigan constitutionally designated colleges and universities are specifically excluded from the definition of “public entity” in this statute.]

While the effect of this statute should be to void only the portion of a contractual indemnity or liability assumption provision that offends the “sole negligence” prohibition, the expanded scope resulting from the 2013 amendments may help achieve better balance in both private and public construction project contractual indemnity provisions.

For more information, please contact Brian Page at 616-776-7509. 

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