16-121. Construction contracts, motor carrier transportation contracts, dealer agreements, franchise agreements; certain indemnification provisions and additional insured provisions void, when.
16-121
16-121. Construction contracts, motor carrier
transportation contracts, dealer agreements, franchise agreements; certain
indemnification provisions and additional insured provisions void,
when.
(a) When used in this section:
(1) "Construction contract" means an agreement for the design,
construction, alteration, renovation, 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, including any moving, demolition or excavation, except that no
deed, lease, easement, license or other instrument granting an interest in or
the right to possess property shall be deemed to be a construction contract
even if the instrument includes the right to design, construct, alter,
renovate, repair or maintain improvements on such real property.
"Construction contract" shall not include any design,
construction, alteration, renovation, repair or maintenance of:
(A) Dirt or gravel roads used to access oil and gas wells and
associated facilities; or (B) oil flow lines or gas gathering
lines used in association with the transportation of production
from oil and gas wells from the wellhead to oil storage
facilities or gas transmission lines.
(2) "Contract" means any construction contract, motor
carrier transportation contract, dealer agreement or franchise
agreement.
(3) "Damages" means personal injury damages, property
damages or economic
loss.
(4) "Dealership agreement" means an oral or written
agreement of definite or indefinite duration between an equipment
manufacturer or service provider and an equipment or service
dealer which provides for the rights and obligations of the
parties with respect to the purchase or sale of such equipment or
services.
(5) "Franchise agreement" means any contract or franchise or
any other terminology used to describe the contractual
relationship between manufacturers,
distributors and dealers, by which:
(A) A right is granted one party to engage in the business
of offering, selling or otherwise distributing goods or services
under a marketing plan or system prescribed in substantial part
by the other party, and in which there is a community of interest
in the marketing of goods or services at wholesale or retail, by
lease, agreement or otherwise; and
(B) the operation of the grantee's business pursuant to
such agreement is substantially associated with the grantor's
trademark, service mark, trade name, logotype, advertising or other commercial
symbol designating the grantor or an affiliate
of the grantor.
(6) "Indemnification provision" means a covenant, promise,
agreement,
clause or
understanding in connection with, contained in, or collateral to a
contract that requires the
promisor to hold harmless, indemnify or defend the promisee or others against
liability for loss or damages.
(7) "Motor carrier transportation contract" means, with
respect to a motor carrier as defined in K.S.A. 66-1,108, and
amendments thereto, a contract, agreement or understanding
covering:
(A) The transportation of property by a motor carrier;
(B) the entrance on property by the motor carrier for the
purpose of loading, unloading or transporting property; or
(C) a service incidental to activity described in clause (A)
or (B) including, but not limited to, storage of property.
"Motor carrier transportation contract" shall not include the
uniform intermodal interchange and facilities access agreement
administered by the intermodal association of North America or
other agreements providing for the interchange, use or possession
of intermodal chassis, containers or other intermodal equipment.
(8) "Mutual indemnity obligation" means an indemnity
obligation in
a contract in which the parties agree to
indemnify each other and each other's contractors and their
employees against loss, liability or damages arising in
connection with bodily injury, death and damage to property of
the respective employees, contractors or their employees, and
invitees of each party arising out of or resulting from the
performance of the agreement.
(9) "Promisee" shall include an agent, employee or independent
contractor who is directly responsible to the promisee.
(10) "Unilateral indemnity obligation" means an indemnity
obligation in
a contract in which one of the parties as promisor agrees
to indemnify the other party as promisee with
respect to claims for personal injury or death to the promisor's
employees or agents or to the employees or agents of the
promisor's contractors but in which the promisee does not make a
reciprocal indemnity to the promisor.
(b) An indemnification provision in a contract which requires the
promisor to indemnify the
promisee for the promisee's negligence
or intentional acts
or omissions is against public
policy and is void and unenforceable.
(c) A provision in a contract which requires a party
to
provide liability coverage to another party, as an additional insured, for such
other party's own negligence or intentional acts or omissions is against public
policy and is void and unenforceable.
(d) This act shall not be construed to affect or impair:
(1) The
contractual
obligation of a contractor or owner to provide railroad protective insurance or
general liability insurance;
(2) an agreement under which an owner, a responsible party
or a governmental entity agrees to indemnify a contractor
directly or through another contractor with respect to strict
liability under environmental laws;
(3) an indemnification agreement that is an integral part of
an offer to compromise or a settlement of a disputed claim, if:
(A) The settlement is based on consideration; (B) the dispute
relates to an alleged event that is related to a construction
contract and that occurred before the settlement is made; and (C)
the indemnification relates only to claims that have arisen or
may arise from the past event;
(4) the validity of any insurance contract, construction
bond or other agreement lawfully issued by an insurer or bonding
company;
(5) a separately negotiated provision or provisions whereby
the parties mutually agree to a reasonable allocation of risk, if
each such provision is: (A) Based on generally accepted industry
loss experience; and (B) supported by adequate consideration; and
(6) an agreement that provides for indemnity if the parties
agree in writing that the indemnity obligation will be supported
by liability insurance coverage to be furnished by the promisor
subject to the following limitations:
(A) With respect to a mutual indemnity obligation, the
indemnity obligation is limited to the extent of the coverage and
dollar limits of insurance or qualified self-insurance each party as promisor
has agreed to obtain for the benefit of the other
party as promisee.
(B) With respect to a unilateral indemnity obligation, the
indemnity obligation
is limited to the extent of the coverage and dollar limits of insurance
the promisor has agreed to obtain for the
benefit of the other party as promisee. Such indemnity obligation
shall be at the promisee's expense
and shall be a separate liability insurance
policy.
(e) Notwithstanding any contractual provision to the
contrary, the laws of the state of Kansas shall apply to and
govern every contract to be performed in this state. Any
litigation, arbitration or other dispute resolution proceeding
arising from such contract shall be conducted in this state. Any
provision, covenant or clause in such contract that conflicts
with the provisions of this subsection shall be void and
unenforceable.
(f) This section applies only to indemnification provisions
and additional insured provisions entered into
after January 1, 2009.
History: L. 2004, ch. 70, § 1;
L. 2008, ch. 132, § 1; Jan. 1, 2009.