Indemnity clauses in the context of the JBCC Contract

Under common law, every person has an obligation not to cause harm to another person through negligence. Such harm could include physical loss or damage to property, physical injury or even tragic loss of life. In circumstances where such loss occurs, the aggrieved person or their successors/heirs may have recourse to a claim for damages against the person who caused such loss.

The Employer is the owner of the construction project and appoints the Contractor to execute the construction work. In the context of a construction contract, an injured person or third party may sue the Contractor and Employer jointly, irrespective of who is at fault and may even sue the consultants on the project. This concept is referred to in the United States as “duck-shoot”.

The indemnity clauses in the JBCC exist because it would be unfair for the Contractor to be held responsible for the Employer’s negligence and vice versa. In terms of the JBCC Contract, the Contractor and Employer are responsible for the damages that they are in the best position to ensure do not occur. In respect of liability to third parties, the Contractor is held accountable for the death of or bodily injury to any third party or physical loss or damage to any property other than the works and the Employer is indemnified in this regard.

The Contractor is also liable for any damage or expense that arises out of non-compliance with any law, regulation or bylaw of any local or other authority or the failure to obtain any permit, licence or approval that the Contractor is required to obtain.

There are however limitations on the liability of the Contractor in the JBCC agreement and these are the instances where the Employer indemnifies the Contractor against any claims or proceedings for damages which arise from actions the Employer is best placed to control. These indemnities offered by the Employer include inter alia, an act or omission of the Employer, the Employer’s employees and/or agents and those whose actions they are responsible for, an act or omission of a direct contractor and the design of the works for which the Contractor is not responsible.

Under the JBCC Principal Building Agreement, 6.2 – May 2018, the indemnities are reflected in clause 9. Clause 9.1, including its subclauses, reflects the indemnities offered by the Contractor and clause 9.2, including its subclauses, reflects the indemnities offered by the Employer in favour of the Contractor.

The risk of lateral support to neighbouring property remains with the Employer in terms of clause 9.2.6 of the JBCC Principal Building Agreement, 6.2 – May 2018. An owner of land has an absolute and continuing obligation not to do anything on his own site that affects the stability of his neighbour’s land adversely.

If you have any further queries, please contact the Association.

Bilaal Dawood

Head: Membership Services