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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, alteration, or renovation, repair, or maintenance of a building,1
structure, highway, road, bridge, water line, sewer line, oil line, gas line,2
appurtenance, or other improvement to real property , or repair or maintenance of3
a highway, road, or bridge, including any moving, demolition, or excavation,4
except that no deed, lease, easement, license, or other instrument granting an interest5
in or the right to possess property will be deemed to be a construction contract even6
if the instrument includes the right to design, construct, alter, renovate, repair, or7
maintain improvements on such real property.8
* * *9
(5) "Third party" means any party not subject to the contractual obligations10
between the indemnities indemnitee and indemnitor; excluding, however, any11
party who has otherwise contracted with the indemnitor or is at the12
indemnitee's facility at the invitation or direction of the indemnitor.13
B. Notwithstanding any provision of law to the contrary and except as14
otherwise provided in this Section, any provision, clause, covenant, or agreement15
contained in, collateral to, or affecting a motor carrier transportation contract or16
construction contract which purports to indemnify, defend, or hold harmless, or has17
the effect of indemnifying, defending, or holding harmless, the indemnities18
indemnitee from or against any liability for loss or damage resulting from the19
negligence or intentional acts or omissions of the indemnities imdemnitee, an agent20
or employee of the indemnities indemnitee, or a third party over which the21
indemnitor has no control is contrary to the public policy of this state and is null,22
void, and unenforceable.23
C. Notwithstanding any provision of law to the contrary and except as24
otherwise provided in this Section, any provision, clause, covenant, or agreement25
contained in, collateral to, or affecting a motor carrier transportation contract or26
construction contract which purports to require an indemnitor to procure liability27
insurance covering the acts or omissions or both of the indemnities indemnitee, its28
employees or agents, or the acts or omissions of a third party over whom the29 SB NO. 693
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indemnitor has no control is null, void, and unenforceable. However, nothing in this1
Section shall be construed to prevent the indemnities indemnitee from requiring the2
indemnitor to provide proof of insurance for obligations covered by the contract.3
D. Notwithstanding any contractual provision to the contrary, the laws of the4
state of Louisiana this Section shall apply to and govern any construction contract5
to be performed in this state and any motor carrier transportation contract relative to6
loading or unloading activities, or any services incidental thereto, which occur in this7
state. Any provision, covenant, or clause in such contracts which conflicts with the8
provisions of this Section shall be null, void, and unenforceable.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 each party assumes13
responsibility for its own personnel and property and agrees to indemnify,14
defend, or hold harmless the other party and the other party's contractors,15
employees, and invitees against loss, liability, or damages in connection with16
bodily injury, death, or damage to the indemnitor's personnel or property17
arising out of, related to, or resulting from the performance of the contract.18
The provisions of this Paragraph shall not apply to the intentional acts of any19
party, or any party's contractors, employees, and invitees.20
(2) Any clause in a construction contract containing the indemnitor's21
promise to indemnify, defend, or hold harmless the indemnitee or an agent or22
employee of the indemnitee if the contract also requires the indemnitor to23
obtain insurance to insure the obligation to indemnify, defend, or hold harmless24
and there is evidence that the indemnitor recovered the cost of the required25
insurance in the contract price; provided, however, that the indemnitor's26
liability under such clause shall be limited to the amount of the proceeds that27
were payable under the insurance policy or policies that the indemnitor was28
required to obtain.29 SB NO. 693
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(3) Any clause in a construction contract that requires the indemnitor1
to procure insurance or name the indemnitee as an additional insured on the2
indemnitor's policy of insurance, but only to the extent that such additional3
insurance coverage provides coverage for liability due to any of the following:4
(a) An obligation to indemnify, defend, or hold harmless authorized5
pursuant to Paragraph (1) of this Subsection; provided that such insurance6
coverage is only provided where the indemnitor is at least partially at fault or7
otherwise liable for damages ex delicto or quasi ex delicto.8
(b) An obligation to indemnify, defend, or hold harmless authorized9
pursuant to Paragraph (2) of this Subsection; provided that such insurance10
coverage is only provided where the indemnitor is at least partially at fault or11
otherwise liable for damages ex delicto or quasi ex delicto.12
Section 2. Section 2 of Act No. 492 of the 2010 Regular Session of the Legislature13
is hereby repealed.14
Section 3. This Act shall become effective upon signature by the governor or, if not15
signed by the governor, upon expiration of the time for bills to become law without signature16
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If17
vetoed by the governor and subsequently approved by the legislature, this Act shall become18
effective on the day following such approval.19
The original instrument was prepared by Sharon F. Lyles. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Riley Boudreaux.
DIGEST
Morrell (SB 693)
Present law prohibits as null and void any provision, clause, covenant, or agreement
contained in, collateral to, or affecting a "motor carrier transportation contract" as defined
in present law or a "construction contract" as defined in present law which:
1. Purports to indemnify, defend, or hold harmless, or has the effect of indemnifying,
defending, or holding harmless, the indemnitee from or against any liability for loss
or damage resulting from the negligence or intentional acts or omissions of the
indemnitee, an agent or employee of the indemnitee, or a "third party" over which
the indemnitor has no control.
2. Requires an indemnitor to procure liability insurance covering the acts or omissions
or both of the indemnitee, its employees or agents, or the acts or omissions of a SB NO. 693
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"third party" over whom the indemnitor has no control.
Present law among other definitions, includes in the definition of ''construction contract'' an
agreement for the design of, or the 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.
Proposed law excludes from such definition of "construction contract" the design of the
items above, and limits the repair and maintenance agreements in such definition to
agreements for the repair or maintenance of a highway, road, or bridge.
Present law defines a "third party" as any party not subject to the contractual obligations
between the indemnitee and the indemnitor.
Proposed law excludes from such definition any party who has otherwise contracted with
the indemnitor or is at the indemnitiee's facility at the invitation or direction of the
indemnitor.
Proposed law provides that provisions of present law shall not invalidate or prohibit the
enforcement of any of the following:
1. Any clause in such a "construction contract" in which each party assumes
responsibility for its own personnel and property and agrees to indemnify, defend,
or hold harmless the other party and the other party's contractors, employees, and
invitees against loss, liability, or damages in connection with bodily injury, death,
or damage to the indemnitor's personnel or property arising out of, related to, or
resulting from the performance of the contract. However, proposed law provides that
this provision does not apply to the intentional acts of any party, or any party's
contractors, employees, and invitees.
2. Any clause in a construction contract containing the indemnitor's promise to
indemnify, defend, or hold harmless the indemnitee or an agent or employee of the
indemnitee 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, but the
indemnitor's liability under such a clause is limited to the amount of the proceeds
that were payable under the insurance policy or policies that the indemnitor was
required to obtain.
3. Any clause in a construction contract that requires the indemnitor to procure
insurance or name the indemnitee 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 and if such insurance
coverage is only provided where the indemnitor is at least partially at fault or
otherwise liable for damages ex delicto or quasi ex delicto.
Present law provides that "Louisiana law" applies to such "construction contracts" performed
in this state or such "motor carrier transportation contracts" relative to loading or unloading
activities, or any services incidental thereto, which occur in this state.
Proposed law changes the application of law to such contracts from "Louisiana law" to the
provisions of present law in R.S. 9:2780.1.
Present law provides that it does not apply to prohibited clauses in any "motor carrier
transportation contract" or " construction contract" entered into prior to January 1, 2011, but
also does not apply to a contract providing indemnity when the contract was executed
before the effective date of the proposed law (August 15, 2010) if the contract governs a SB NO. 693
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specific terminable performance of a specific job or activity.
Proposed law repeals the provision providing that the present law does not apply to a
contract executed before August 15, 2010, if the contract governs a specific terminable
performance of a specific job or activity.
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))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Transportation,
Highways, and Public Works to the original bill
1. Limits the repair and maintenance agreements in the definition of
"construction contract" subject to the present law above to agreements for
the repair or maintenance of a highway, road, or bridge.
2. Removes the adjective "major" in the definition of "construction contract"
limiting the application of present law to contracts for the "major" alteration,
renovation, or improvements to real property projects.
3. Removes a limitation on the prohibition of any contract provision which
requires an indemnitor to procure liability insurance, that such provision
cover "negligent or intentional" acts or omissions.
4. Removes an exemption from the law for any contract to which the state of
Louisiana or any of its political subdivisions is a party.
5. Provides that the provision in proposed law allowing any clause in
"construction contracts" in which each party assumes responsibility for its
own personnel and property and agrees to indemnify, the other party against
loss in connection with bodily injury, death, or damage to the indemnitor's
personnel or property arising out of, related to, or resulting from the
performance of the contract, does not apply to the intentional acts of any
party, or any party's contractors, employees, and invitees.
6. Limits the provision in proposed law allowing any clause in "construction
contracts" that requires the indemnitor to procure insurance or name the
indemnitee as an additional insured on the indemnitor's policy of insurance
to the extent that the additional insurance coverage provides coverage for
liability permitted by the proposed law, by requiring that such insurance
coverage is only provided where the indemnitor is at least partially at fault
or otherwise liable for damages ex delicto or quasi ex delicto.