Interior Design Contract Indemnity Clause

[DZLs]

Jurisdiction

California

I have a small interior design practice where we advise clients on the purchasing of furniture and accessories. Everything is purchased directly, by the client, through the retailer, vendor, or manufacturer (we don't sell anything directly). All sub-contractors (ie. electrician to change light fixture) are hired directly by the client.

We are working with a new client whose lawyer has notes on our (very simple) work authorization/ contract. Though we've never had another client add/change anything in a contract, nothing they've requested seems unreasonable or out of the ordinary, so we are happy to oblige. However, they've asked us to attach "Exhibit A" to the agreement, with Point 1 stating we will provide them a copy of our liability insurance (no problem). Point 2 is an indemnity clause, which seem too far-reaching and indefinite. As stated:

2. INDEMNITY:
Designer shall, to the fullest extent permitted by law, defend, at their sole cost and expense, all claims through legal counsel selected by Client, and indemnify and hold Client and all of his, representatives, agents, servants, and employees, harmless from and against claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, costs and expenses (including without limitation attorneys' fees, expert fees and all other costs of litigation) of every kind and nature arising from and to the extent caused by the Designer's negligent acts, errors or omissions in the performance of its services under the WORK AUTHORIZATION to which this Exhibit A is attached. This indemnity obligation shall survive the termination of the WORK AUTHORIZATION and substantial completion of the project described in the WORK AUTHORIZATION. This indemnity shall include all acts or omissions of Designer and anyone directly or indirectly employed by them. Designer's obligations under this section shall not extend to any claims to the extent such claims arise from the sole negligence, willful misconduct or intentional act of the Client.

In the event of any inconsistency between the terms and conditions of this Exhibit "A" and the terms and conditions of the WORK AUTHORIZATION to which it is attached, the terms and conditions of this Exhibit "A" shall prevail.

I know indemnity clauses are typical in agreements, but is this standard language, or should I push back? To be honest, I don't really understand the practical ramifications of such language. Your thoughts are much appreciated.

 

[army judge]

If this is for your business, your livelihood, your professional reputation; you don't want to seek FREE internet advice.

You should be consulting with your firm's attorney.

If you don't have an attorney for your business, you desperately need one, as much as you need a CPA or tax attorney.

 

[DZLs]

Thank you for your response. I do have a meeting with an attorney tomorrow but, as it's the first time I will meet with said attorney (I recently moved to a new state), I had hoped to come prepared with greater understanding of indemnity clauses and what might be standard language vs red flags to question. I have read a lot online regarding indemnity clauses, but find this specific language vague and far-reaching. While googling the terms, I came across this forum and thought it wouldn't hurt to read others' opinions.

 

[jayh991]

The clause appears pretty standard. However, there are a few parts that concern me. First, the wording states that you are indemnifying "all claims" which is a bit extreme. I would recommend modifying that to "reasonable claims". This will give you more standing if there is an outrageous claim against the client. For example, suppose a visitor to your clients home bumps into a table, falls and breaks a hip. The client may claim that the table caused the injury due to poor placement from your design and place the cost of the injury on you.

I am also hesitant to let the clause go on without a firm end point. Although not unreasonable to extend past the substantial work phase, I would suggest modifying it to include an end date such as "the clause will not exceed a period of one year past the completion date or end of substantial work".

The last point is the client is absolving you only if they are the "sole responsible" party for negligence. It seems tacky but if they make the legal argument you are in any way liable, then the clause kicks in and you might be stuck with the bill. I would suggest removing the word "sole". This ensures that if the client is in any way negligible then you are not responsible.

Not required, but always suggested is to set a cap limit on the damages you can be held liable. You can include the indemnity clause for $100,000 or $1,000,000 but you should cap the amount. You can negotiate a higher rate or get insurance to cover the potential loss.