Fishing for perfect contractual risk allocation; let
me know if you catch anything.
Walter Neff:
Just like the first time I was here. We were
talking about automobile insurance. Only you
were thinking about murder. And I was thinking
about that anklet.
(a) the primary risk allocation clauses in a
service contract, namely indemnity and
insurance procurement clauses;
(b) a contractor’s exposure if its property and
liability insurance doesn’t meet the
requirements of the indemnity and insurance
procurement clauses it agreed to in its service
contract.
.
(Shaun Tan illustration: They came by water, from ‘The Rabbits’, 1998)
If a loss is because of someone’s carelessness,
the law of negligence will usually require the
careless person to compensate the innocent
victim.
Work related and non-work related injuries.
Where two parties independently and
negligently cause property damage (concurrent
tortfeasors), they are each only liable to the
extent to which they were responsible for the
damage: the Proportionate Liability Act.
(a) The broad or ‘bare’ indemnity clause;
(b) The ‘reflexive’ or ‘reverse’ indemnity clause;
(c) The ‘qualified’ indemnity clause.
Also known as ‘mutual hold harmless’,
‘reciprocal’ or more crudely ‘bury your own
dead’ indemnity clauses.
To paraphrase Walter Neff in Double
Indemnity:
Just like the first time I was here. We
were talking about you giving me a
service contract. Only you were
thinking about how to limit your risks.
And I was thinking about how badly I
wanted the contract.