A provision in a contract that requires one contracting party to respond to
certain legal liabilities of the other party. For example, construction
contracts typically require the contractor to indemnify the owner with respect
to the owner's liability to members of the public who are injured or whose
property is damaged during the course of the contractor's operations. There
are a number of types of hold harmless clauses, differentiated by the extent of
the liabilities they transfer. The most commonly used types of clauses are the
"broad," "intermediate," and "limited" form hold
harmless clauses.
- Limited form—Where Party A holds Party B
harmless for suits arising out of Party A's sole negligence. Party B is
thus protected when it is held vicariously responsible for the actions of
Party A.
- Intermediate form—Where Party A holds Party B
harmless for suits alleging sole negligence of Party A or negligence of both
parties.
- Broad form—Where Party A holds Party B harmless
for suits against Party B based on the sole negligence of A, joint negligence
of A and B, or the sole negligence of B. Broad form hold harmless agreements
are unenforceable in a number of states.