Indemnity and Liability in Construction Contracts

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Questions and Answers

What remains the responsibility of the employer regardless of contractual agreements regarding excavation work?

Compensating for damage to neighbouring properties (correct)

Monitoring worker safety on-site

Ensuring the contractor meets deadlines

Securing tools and equipment on site

Which of the following is NOT a requirement for insurance policies related to excavation work?

Use of heavy machinery at all times (correct)

Implementation of temporary shoring

Monitoring of safety measures

Design by a registered engineer

What must contractors indemnify the employer against?

Future market fluctuations

Increase in insurance premiums

Temporary relocations of employees

Legal actions from non-compliance with laws (correct)

What is one purpose of conducting pre-construction inspections of neighboring properties?

To document pre-existing issues for liability claims Signup and view all the answers

Subcontractors are obligated to indemnify the contractor against which of the following?

Legal claims from non-compliance with regulations Signup and view all the answers

Who is primarily liable for ensuring the safety of the construction site?

The contractor Signup and view all the answers

In what situation can a contractor be held liable for third-party claims?

For damage to property other than the works Signup and view all the answers

What responsibility does the employer have in relation to independent contractors?

Liability for acts by independent contractors hired by them Signup and view all the answers

Who must indemnify the contractor against third-party claims?

The employer Signup and view all the answers

Under what circumstances is the contractor indemnified against loss or damage after practical completion?

For loss or damage to the contents of the works after practical completion Signup and view all the answers

What must a contractor do if an event causing loss or damage occurs?

Immediately notify the principal agent Signup and view all the answers

What is a key principle concerning the contractor's liability for third parties?

Contractors must avoid harm through negligence Signup and view all the answers

What does the employer indemnify the contractor against?

Claims or costs caused by the employer’s acts or omissions Signup and view all the answers

When does the contractor assume full responsibility for the works?

From the date of possession of the site Signup and view all the answers

Who is liable for damage caused by acts of God after practical completion?

The contractor Signup and view all the answers

Which of the following is included in the contractor's liability for loss or damage?

The cost of professional services Signup and view all the answers

What limits the contractor's liability concerning physical loss or damage?

The amount specified in the contract Signup and view all the answers

Which act or omission does not make the contractor liable for damage after practical completion?

Damage caused by the employer's employees Signup and view all the answers

In the case of damage caused by materials specified by trade name, what is the contractor's obligation?

Not liable if defects arise from specified materials Signup and view all the answers

What type of claims are the contractor NOT liable for after the date of practical completion?

Claims arising from employer's use of the works Signup and view all the answers

Which of the following scenarios would most likely shift liability for damages to the employer?

A defect appears in materials provided by the employer Signup and view all the answers

Study Notes

Indemnity Against Loss or Damage

Contractor is obligated to indemnify against loss or damage to third parties.
Contractor is responsible for injury, death, and property damage to third parties caused by negligence.
Employer is responsible for harm caused by:
- Employer, their agents, or employees.
- Independent contractors hired by the employer
- Occupants or tenants using parts of the works before completion.
Both subcontractors and contractors are responsible for third-party claims

Loss of Lateral Support

Employer has a legal duty to ensure their work does not compromise the natural stability of neighbouring properties.
Employer is liable for damage to neighbouring properties even if the contractor performs the excavation work.
Contractor is not responsible for design faults, defects in free issue or materials and goods specified by trade name where the contractor has no right of substitution
Contractor is not liable for damage caused by:
- The use or occupation of any part of the works by the employer, the employer's employees and/or agents and those for whose actions they are responsible.
- An act or omission of the employer, the employer's employees and/or an agent and those for whose actions they are responsible.
- An act or omission by a direct contractor.
- The use or occupation of any part of the works by a direct contractor.
- The design of the works for which the contractor is not responsible.
- Defects in free issue or materials and goods specified by trade name where the contractor has no right of substitution.

Works Risk

Contractor takes full responsibility for the works from the date possession of the site is given to the contractor.
Employer takes full responsibility for the works from the date the certificate of practical completion is issued.
Contractor is responsible for making good physical loss and repairing damage to the works caused by:
- Acts of God, unforeseen circumstances.
- Any cause before the date of practical completion.
- Any act or omission of the contractor in the course of any work carried out in pursuance of the contractor’s obligations after the date of practical completion.

Limitation of Liability

Contractor is responsible for:
- The cost of making good physical loss and repairing damage to the works including clearing away and removing all debris and any other costs to reinstate the works.
- The new replacement value of free issue.
- The cost of additional professional services.
Contractor's liability is limited to:
- The amount of the contract works insurance.

Additional Indemnities

Contractor must indemnify the employer for:
- Any legal actions resulting from the contractor’s failure to comply with laws, bylaws, or regulations.
- Loss or damage to tools, equipment, and plant used by the contractor or their subcontractors on-site.
Subcontractors are obligated to indemnify the contractor against:
- Legal claims stemming from non-compliance with regulations.
- Loss or damage to subcontractors’ tools and equipment.

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Description

This quiz covers key principles related to indemnity against loss or damage in construction contracts, including the responsibilities of contractors and employers. It also addresses issues of lateral support and liabilities for damage to neighboring properties. Test your understanding of contractor and employer obligations in safeguarding third-party interests.