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Regular Session, 2012
SENATE BILL NO. 693
BY SENATOR MORRELL
CONTRACTS. Provides relative to motor carrier transportation contracts and construction
contracts. (gov sig)
AN ACT1
To amend and reenact R.S. 9:2780.1(A)(2)(a), (A)(5), (B), (C), and (D), to enact R.S.2
9:2780.1(G), and to repeal Section 2 of Act No. 492 of the 2010 Regular Session of3
the Legislature, relative to construction contracts; to provide relative to definitions;4
to exclude certain contracts; to provide relative to the enforcement of certain clauses5
in construction contracts; to repeal a provision excluding certain contracts; and to6
provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 9:2780.1(A)(2)(a), (A)(5), (B), (C), and (D) are hereby amended and9
reenacted and R.S. 9:2780.1(G) is hereby enacted to read as follows:10
ยง2780.1. Certain contract provisions invalid; motor carrier transportation contracts;11
construction contracts12
A. For purposes of this Section, the following terms have the meanings13
ascribed to them by this Subsection, except where the context clearly indicates14
otherwise:15
* * *16
(2)(a) ''Construction contract'' shall mean any agreement for the design,17 SB NO. 693
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construction, major alteration, or major renovation, repair, or maintenance of a1
building, structure, highway, road, bridge, water line, sewer line, oil line, gas line,2
appurtenance, or other major improvement to real property, including any moving,3
demolition, or excavation, except that no deed, lease, easement, license, or other4
instrument granting an interest in or the right to possess property will be deemed to5
be a construction contract even if the instrument includes the right to design,6
construct, alter, renovate, repair, or maintain improvements on such real property.7
* * *8
(5) "Third party" means any party not subject to the contractual obligations9
between the indemnities and indemnitor; excluding, however, any party who has10
otherwise contracted with the indemnitor or is at the indemnities' facility at the11
invitation or direction of the indemnitor.12
B. Notwithstanding any provision of law to the contrary and except as13
otherwise provided in this Section, any provision, clause, covenant, or agreement14
contained in, collateral to, or affecting a motor carrier transportation contract or15
construction contract which purports to indemnify, defend, or hold harmless, or has16
the effect of indemnifying, defending, or holding harmless, the indemnities from or17
against any liability for loss or damage resulting from the negligence or intentional18
acts or omissions of the indemnities, an agent or employee of the indemnities, or a19
third party over which the indemnitor has no control is contrary to the public policy20
of this state and is null, void, and unenforceable.21
C. Notwithstanding any provision of law to the contrary and except as22
otherwise provided in this Section, any provision, clause, covenant, or agreement23
contained in, collateral to, or affecting a motor carrier transportation contract or24
construction contract which purports to require an indemnitor to procure liability25
insurance covering the negligent or intentional acts or omissions or both of the26
indemnities, its employees or agents, or the acts or omissions of a third party over27
whom the indemnitor has no control is null, void, and unenforceable. However,28
nothing in this Section shall be construed to prevent the indemnities from requiring29 SB NO. 693
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the indemnitor to provide proof of insurance for obligations covered by the contract.1
D.(1) Notwithstanding any contractual provision to the contrary, the laws of2
the state of Louisiana this Section shall apply to and govern any construction3
contract to be performed in this state and any motor carrier transportation contract4
relative to loading or unloading activities, or any services incidental thereto, which5
occur in this state. Any provision, covenant, or clause in such contracts which6
conflicts with the provisions of this Section shall be null, void, and unenforceable.7
(2) This Section shall not apply to any contract to which the state of8
Louisiana or any of its political subdivisions is a party.9
* * *10
G. Nothing in this Section shall invalidate or prohibit the enforcement11
of any of the following:12
(1) Any clause in a construction contract in which the parties13
reciprocally agree to indemnify, defend, or hold harmless each other and each14
other's contractors, employees, and invitees against loss, liability, or damages15
in connection with bodily injury, death, or property damage arising out of,16
related to, or resulting from the performance of the contract.17
(2) Any clause in a construction contract containing the indemnitor's18
promise to indemnify, defend, or hold harmless the indemnities or an agent or19
employee of the indemnities if the contract also requires the indemnitor to20
obtain insurance to insure the obligation to indemnify, defend, or hold harmless21
and there is evidence that the indemnitor recovered the cost of the required22
insurance in the contract price.23
(3) Any clause in a construction contract that requires the indemnitor24
to procure insurance or name the indemnities as an additional insured on the25
indemnitor's policy of insurance, but only to the extent that such additional26
insurance coverage provides coverage for liability due to any of the following:27
(a) An obligation to indemnify, defend, or hold harmless authorized28
pursuant to Paragraph (1) of this Subsection.29 SB NO. 693
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(b) An obligation to indemnify, defend, or hold harmless authorized1
pursuant to Paragraph (2) of this Subsection.2
Section 2. Section 2 of Act No. 492 of the 2010 Regular Session of the Legislature3
is hereby repealed.4
Section 3. This Act shall become effective upon signature by the governor or, if not5
signed by the governor, upon expiration of the time for bills to become law without signature6
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If7
vetoed by the governor and subsequently approved by the legislature, this Act shall become8
effective on the day following such approval.9
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Sharon F. Lyles.
DIGEST
Present law prohibits certain provisions requiring indemnification in certain motor carrier
contracts and certain construction contracts.
Present law defines a ''construction contract'' to mean any agreement for the design,
construction, alteration, renovation, repair, or maintenance of a building, structure, highway,
road, bridge, water line, sewer line, oil line, gas line, appurtenance, or other improvement
to real property, including any moving, demolition, or excavation, except that no deed, lease,
easement, license, or other instrument granting an interest in or the right to possess property
will be deemed to be a construction contract even if the instrument includes the right to
design, construct, alter, renovate, repair, or maintain improvements on such real property.
Proposed law limits the definition of "construction contract" to agreements for construction,
"major" alterations or renovations and other "major" improvements to real property, and
specifically excludes from the definition repair and maintenance contracts.
Present law prohibits any provision, clause, covenant, or agreement contained in, collateral
to, or affecting a motor carrier transportation contract or construction contract which
purports to indemnify, defend, or hold harmless, or has the effect of indemnifying,
defending, or holding harmless, the indemnities from or against any liability for loss or
damage resulting from the "negligence or intentional" acts or omissions of the indemnities,
an agent or employee of the indemnities, or a "third party" over which the indemnitor has
no control is contrary to the public policy of this state and is null, void, and unenforceable.
Present law also prohibits any requirement in such contracts that require an indemnitor to
procure liability insurance covering such acts or omissions.
Proposed law retains present law and clarifies that the prohibition requiring an indemnitor
to procure liability insurance on acts or omissions applies to insuring "negligent or
intentional" acts or omissions.
Present law defines a "third party" as any party not subject to the contractual obligations
between the indemnities and indemnitor.
Proposed law retains present law but excludes any party who has otherwise contracted with
the indemnitor or is at the indemnities' facility at the invitation or direction of the SB NO. 693
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indemnitor.
Proposed law excludes any contract to which the state of Louisiana or any of its political
subdivisions is a party from the provisions of present law.
Proposed law provides that provisions of present law shall not invalidate or prohibit the
enforcement of any of the following:
1. Any clause in a construction contract in which the parties reciprocally agree to
indemnify, defend, or hold harmless each other and each other's contractors,
employees, and invitees against loss, liability, or damages in connection with bodily
injury, death, or property damage arising out of, related to, or resulting from the
performance of the contract.
2. Any clause in a construction contract containing the indemnitor's promise to
indemnify, defend, or hold harmless the indemnities or an agent or employee of the
indemnities if the contract also requires the indemnitor to obtain insurance to insure
the obligation to indemnify, defend, or hold harmless and there is evidence that the
indemnitor recovered the cost of the required insurance in the contract price.
3. Any clause in a construction contract that requires the indemnitor to procure
insurance or name the indemnities as an additional insured on the indemnitor's policy
of insurance, but only to the extent that such additional insurance coverage provides
coverage for liability due to an obligation to indemnify, defend, or hold harmless
authorized by proposed law in Paragraphs (1) and (2) above.
Present law excludes from present law both:
1. Prohibited clauses in any motor carrier transportation contract and any construction
contract entered into prior to January 1, 2011.
2. Contracts providing indemnity to the indemnities executed before August 15, 2010,
if the contract governs a specific terminable performance of a specific job or activity.
Proposed law repeals the exclusion of contracts executed before August 15, 2010 in
Paragraph (2) above.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 9:2780.1(A)(2)(a), (A)(5), (B), (C), and (D); adds R.S. 9:2780.1(G))