Minnesota Session Laws - 1984, Regular Session

  

                         Laws of Minnesota 1984 

                        CHAPTER 598-S.F.No. 1974 
           An act relating to commerce; clarifying the 
          limitations on enforcement of indemnification 
          agreements in construction contracts; amending 
          Minnesota Statutes 1983 Supplement, sections 337.01, 
          subdivisions 2, 3, and 4; 337.02; 337.03; and 337.05, 
          subdivision 2, and by adding subdivisions; and Laws 
          1983, chapter 333, section 6; proposing new law coded 
          in Minnesota Statutes, chapter 337. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1983 Supplement, section 
337.01, subdivision 2, is amended to read: 
    Subd. 2.  [BUILDING AND CONSTRUCTION CONTRACT.] "Building 
and construction contract" means a contract for the design, 
construction, alteration, improvement, repair or maintenance of 
real property, highways, roads or bridges.  The term does not 
include contracts for the maintenance or repair of machinery, 
equipment or other such devices used as part of a manufacturing, 
converting or other production process, including electric, gas, 
steam, and telephone utility equipment used for production, 
transmission, or distribution purposes. 
     Sec. 2.  Minnesota Statutes 1983 Supplement, section 
337.01, subdivision 3, is amended to read: 
    Subd. 3.  [INDEMNIFICATION AGREEMENT.] "Indemnification 
agreement" means an agreement by the promisor to indemnify or 
hold harmless the promisee against liability or claims of 
liability for damages arising out of bodily injury to persons or 
out of physical damage to tangible or real property. 
     Sec. 3.  Minnesota Statutes 1983 Supplement, section 
337.01, subdivision 4, is amended to read: 
    Subd. 4.  [PROMISEE.] "Promisee" includes that party's 
independent contractors, agents, employees or indemnities 
indemnitees. 
     Sec. 4.  Minnesota Statutes 1983 Supplement, section 
337.02, is amended to read: 
    337.02 [UNENFORCEABILITY OF CERTAIN AGREEMENTS.] 
    An indemnification agreement contained in, or executed in 
connection with, a building and construction contract is 
unenforceable except to the extent that the underlying injury or 
damage is attributable to the promisor's negligent or otherwise 
wrongful act or omission, including breach of a specific 
contractual duty, of the promisor or the promisor's independent 
contractors, agents, employees, or delegatees. 
     Sec. 5.  Minnesota Statutes 1983 Supplement, section 
337.03, is amended to read: 
    337.03 [NONAPPLICATION TO CERTAIN AGREEMENTS.] 
    Sections 337.01 to 337.05 do not apply to an agreement by 
which a contractor responsible for the performance of promisor 
that is a party to a building and construction contract 
indemnifies a person, firm, corporation, or public agency for 
whose account the construction is not being performed, but who, 
as an accommodation, permits the contractor promisor or the 
promisor's independent contractors, agents, employees, or 
delegatees to enter upon or adjacent to its property for the 
purpose of performing the building and construction contract for 
another.  Sections 337.01 to 337.05 do not apply to an 
indemnification agreement which that is an integral part of an 
offer to compromise or settlement of a disputed claim, if: 
    (a) the settlement is based on consideration;  
    (b) the dispute relates to an alleged event which that is 
related to a construction contract and which that occurred 
before the settlement is made; and 
    (c) the indemnification relates only to claims which that 
have arisen or may arise from the past event. 
    Sec. 6.  Minnesota Statutes 1983 Supplement, section 
337.05, subdivision 2, is amended to read: 
    Subd. 2.  [INDEMNIFICATION FOR BREACH OF AGREEMENT.] If: 
    (a) a promisor agrees to provide specific types and limits 
of insurance; and 
    (b) a claim arises within the scope of the specified 
coverage insurance; and 
    (c) the promisor did not obtain and keep in force the 
specified coverage insurance;  
    then, as to that claim and regardless of section 337.02, 
the promisee may shall have indemnification from the promisor to 
the same extent as the specified coverage insurance.  
    Sec. 7.  Minnesota Statutes 1983 Supplement, section 
337.05, is amended by adding a subdivision to read: 
     Subd. 4.  [INDEMNIFICATION REGARDING DEDUCTIBLE AMOUNTS.] 
If: 
     (1) a promisor agrees to provide specific types and limits 
of insurance; and 
     (2) a claim arises within the scope of the specified 
insurance; and 
     (3) the insurance provided by the promisor includes a 
self-insured retention or a deductible amount; 
     then, as to that claim and regardless of section 337.02, 
the promisee shall have indemnification from the promisor to the 
full extent of the deductible amount or self-insured retention. 
     Sec. 8.  Minnesota Statutes 1983 Supplement, section 
337.05, is amended by adding a subdivision to read:  
    Subd. 5.  [NO WAIVER BY CERTIFICATES.] A promisor's 
obligation to provide specified insurance is not waived by 
either or both of the following:  
    (1) a promisee's failure to require or insist upon 
certificates or other evidence of insurance;  
    (2) a promisee's acceptance of a certificate or other 
evidence of insurance that shows a variance from the specified 
coverage.  
    Sec. 9.  [337.06] [COMMON LAW RIGHTS.] 
     Subject to section 337.02, sections 337.01 to 337.06 do not 
in any way restrict rights to indemnification that the common 
law may provide.  
    Sec. 10.  Laws 1983, chapter 333, section 6, is amended to 
read: 
    Sec. 6.  [EFFECTIVE DATE.] 
    Sections 1 to 5 are effective May August 1, 1984, and apply 
to all applicable agreements executed on or after that date. 
    Sec. 11.  [EFFECTIVE DATE.] 
    Sections 1 to 9 are effective August 1, 1984.  Section 10 
is effective the day following final enactment. 
    Approved April 26, 1984