Indemnification clauses, or “hold harmless” clauses, can be powerful tools in a contract, offering protection from liability arising from another party’s actions or negligence. However, these clauses can be difficult to enforce in New Jersey if not carefully drafted. Courts have often struck them down for being vague or failing to comply with broader contract obligations. Understanding how to construct an indemnification clause properly can prevent unwanted legal consequences for parties to the contract. At Di Lauri & Hewitt Law Group, we understand the complexities of indemnification in New Jersey contract law and can help you draft clear, enforceable clauses that protect your interests and hold up in court.
Improperly Constructed Clauses May Be Unenforceable
Courts in New Jersey have made it clear: precision is key. If an indemnification clause is too vague or fails to meet specific legal standards, it may be deemed unenforceable—leaving parties exposed to significant liability.
One notable example is Azurak v. Corporate Property Investors (2002). In this case, a janitorial firm (PBS) was hired by Corporate Property Investors (CPI) to clean a shopping mall. When a mall visitor was injured, CPI tried to shift liability to PBS under the indemnification clause. However, the court found the clause unenforceable due to vague language and the absence of any reference to CPI’s own negligence. The result? Both parties shared liability.
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Similarly, in James Fulmore v. Westmount-Arlington (2014), the court invalidated an indemnification clause in a lease agreement due to noncompliance with other contract obligations and failure to address the landlord’s own negligence. The injury occurred because of a faulty door the landlord had agreed to fix—but never did. The court held that indemnification cannot cover a party’s own negligence unless it is clearly and explicitly stated in the contract.
An Enforceable Indemnification Clause
What an Enforceable Clause Looks Like
While there’s no one-size-fits-all template, enforceable indemnification clauses typically include:
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Clear and specific language
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Mutual obligations (if appropriate)
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Explicit reference to negligence, especially if a party wants to be indemnified for their own
A well-regarded example published by the American Bar Association in 2008 includes comprehensive indemnification language covering property damage, third-party claims, and negligence—while naming the specific parties covered. Even so, in New Jersey, this clause might still be unenforceable without direct language regarding responsibility for a party’s own negligence.
Make It Enforceable—The Right Way
New Jersey contract law is nuanced, and even small oversights can lead to major consequences. Whether you’re drafting a lease, partnership agreement, or service contract, working with experienced legal professionals can ensure your indemnification clause protects you as intended.
At Di Lauri & Hewitt Law Group, we help businesses and individuals draft enforceable contracts that stand up in court.
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