Hold Harmless Agreement: A Basic Guide

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A hold harmless agreement is a legal contract where one party agrees not to hold the other responsible for certain risks, often specified in the agreement. Hold harmless agreements typically apply to physical damage or risk. These agreements can either be one-way (known as unilateral) agreements, or they can be mutual (known as reciprocal) agreements. You can sign a hold harmless agreement either before or after the activity covered occurs.

Other names for a hold harmless agreement include:

When Should You Use a Hold Harmless Agreement?

Businesses that provide high-risk activities (skydiving sessions, for example) frequently hold harmless agreements. Though these agreements do not offer absolute liability protection, they do indicate that a customer acknowledges certain risks and agrees to take these risks. Hold harmless agreements are also used often in the construction industry.

However, even if you don't operate a high-risk business, there are plenty of reasons why you might choose to use a hold harmless agreement. Common examples include:

Example Scenario

Here's an example of a common scenario when people may choose to use a hold harmless agreement. You decide you want to hire someone who will do remodeling work on your property. You don't want to be held liable should the workers hurt themselves while on property you own, so you ask them to sign a hold harmless agreement to ensure you're protected if an incident does occur.

At the same time, the contractors also want protection while doing their job on your property. They may, in turn, ask you to sign a harmless agreement so they are not held liable if someone wanders into the construction site and gets hurt.

What Information Should a Hold Harmless Agreement Include?

Any hold harmless agreement should include a few key provisions, including:

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Types of Hold Harmless Agreements

A few basic types of hold harmless agreements exist, including:

Hold harmless agreements are common in the construction industry as part of construction contracts. Here is an article about construction contracts.

A few basic types of hold harmless agreements are used for construction:

Who Execute Hold Harmless Agreements?

Hold harmless agreements are an important tool in risk governance and are commonly used in a wide range of contexts. In addition, the enforceability of hold harmless agreements can differ by jurisdiction and may be subject to legal restrictions and provisions. Additionally, some jurisdictions may have ordinances or limitations on the use of hold harmless clauses in specific contexts, such as consumer contracts, to safeguard the rights of individuals. Therefore, it is advisable to consult with a legal advisor when preparing or executing such agreements to ensure that they comply with relevant regulations and provide the intended protections. Also, hold harmless agreements can be implemented by a wide range of individuals and organizations, depending on the specific circumstances and the nature of the legal agreement. Below are the key parties who execute hold harmless agreements:

Will Your Hold Harmless Agreement Stand Up in Court?

When it comes to hold harmless agreements, validity varies based on where you are located and the exact situation described in your agreement. Simply having a hold harmless agreement won't always protect you from a lawsuit. Additionally, a hold harmless agreement could be deemed null and void if the signing party presents a strong case about being coerced into signing the agreement.

You will need to make certain that any hold harmless agreement you use is legally compliant in your state so that you are protected from potential losses. Some states won't uphold this type of agreement if it draws on overly broad or nebulous language to protect from liability. States may also have anti-indemnity laws prohibiting hold harmless agreements in certain construction situations. Still, other hold harmless agreements may not stand up in court if the injury occurs as the result of negligence from something like subpar equipment.

Your best bet is working with an experienced lawyer who can advise you about the enforceability of your agreement and ensure you use the best language for your unique situation. That way, you'll know you have a hold harmless agreement that works for you and your business.

Final Thoughts on Hold Harmless Agreements

A hold harmless agreement offers valuable security for companies and people alike. By using these contracts, parties can assign risks, restrict their liabilities, and protect themselves from potential legal lawsuits arising from the acts or negligence of others. Nevertheless, it is essential to prepare these agreements thoughtfully and consult legal experts to ensure they are enforceable and provide sufficient protection for all parties involved.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.