Bill Summary for H 871 (2019-2020)

Summary date: 

Jun 26 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 871 (Public) Filed Tuesday, April 16, 2019
AN ACT TO PROTECT THE INTERESTS OF DESIGNERS, PARTICULARLY SMALL AND WMBE ENTITIES, FROM UNFAIR CONTRACTING AND DUTY TO DEFEND REQUIREMENTS THAT VIOLATE THE EXISTING PUBLIC POLICY OF NORTH CAROLINA.
Intro. by Arp, Stevens, Reives, Floyd.

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Bill summary

Senate amendment to the 1st edition makes the following change.

Deletes the proposed changes to GS 22B-1, and instead amends the statute to provide the following. Renders provisions in or in connection with a construction agreement or design professional agreement void and unenforceable if they require a promisor to indemnify or hold harmless the promisee, or its agents, against liability claims for damages for liabilities arising out of bodily injury to persons or damage to property proximately caused by or resulting from the negligence of the promisee or its agents (previously, voided specified construction promises or agreements). Similarly, renders provisions in or in connection with a construction agreement or design professional void and unenforceable if they require the promisor to indemnify or hold harmless the promisee, or its agents, against losses, damages, or expenses, unless the fault of the promisor or its derivative parties is a proximate cause of the loss, damage, or expense indemnified. Provides that these provisions do not exclude from any enforceable indemnity or hold harmless provisions attorneys' fees, litigation or arbitration expenses, or court costs actually incurred by the promisee to defend against third party claims, if the fault of the promisor or its derivative parties is a proximate cause of the attorneys' fees litigation or arbitration expenses, or court costs to be indemnified. 

Additionally, renders provisions in or in connection with a construction agreement that includes design professional services or a design professional agreement void and unenforceable if they require a design professional to defend a promissee or its agents, or any other person or entity, against liability or claims for damages or expenses, including attorneys' fees, proximately caused or allegedly caused by the professional negligence of the promisor, the promisee, or other derivative parties. 

Maintains that the statute does not affect an insurance contract, workers' compensation, or any other agreement issued by an insurer. Eliminates the exemption for promises or agreements under which a public utility is an indemnitee, and contracts entered into by the Department of Transportation under GS 136-28.1. Exempts from the statute lien or bond claims asserted under GS Chapter 44A, Statutory Liens and Charges. 

Adds eight defined terms.

Changes the effective date of the act from October 1, 2019, to August 1, 2019.

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