We usually think of contracts as being an issue in the construction industry. While that's true, businesses of every kind are constantly signing a wide variety of agreements, everything from vending machine services to large scale product distribution terms to alarm service agreements.

To the knowledgeable and experienced writer, a contract represents the ideal opportunity to transfer one's legal liabilities to another.   The manufacturer of a product may wish to pass off his liability to a vendor for claims caused by his product .  The guard service company may wish to have you assume its liability if one of its employees shoots a trespasser on your property.  The elevator or escalator service company may wish to have you assume all responsibility for injuries, even if they were caused by faulty repairs or adjustments.  In construction contracts, general contractors in particular have realized the huge insurance & legal cost savings to be gained by redirecting liability for every conceivable claim to the trade subcontractors.  Given the often gross bargaining imbalance, tradesmen may rush to accept work with little or no attention to the fine print.

This practice has, over the years, become so widespread and occasionally so unfair and egregious that courts have at times been moved to invalidate these shifts of liability.  The legal result in any given situation is usually subject to a multitude of factors, not the least being the particular jurisdiction where you are heard.

Commercial liability insurance may include insurance for these assumptions of liability, however the coverage may be limited in scope, or may not be present at all.  Ask for it.

Read everything you sign. Seek legal counsel.  You could get very ugly surprises later if you don't.


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