Arizona Indemnities
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FAQ
In general, SB 1231 amended Arizona's public anti-indemnity statutes by clarifying and expanding the situations under which the state, and local governments, cannot require contractors, subcontractors and design professionals to indemnify a government body for the negligence of others.
The importance of the parties' intentions is reflected by the fact that substantive clauses (such as restraint of trade and confidentiality clauses) are often drafted in a manner that clarifies that they survive a termination of a contract.
Indemnification in Contracts They reduce the legal hurdles to recover more. Generally speaking, they're easier to enforce because the indemnity creates an express remedy in the contract for payment of money: for a breach of a contractual promise: a warranty, innominate term or a condition.
Indemnity is a type of insurance compensation paid for damage or loss. When the term is used in the legal sense, it also may refer to an exemption from liability for damage. Indemnity is a contractual agreement between two parties in which one party agrees to pay for potential losses or damage caused by another party.
A Survival clause may provide that certain representations and warranties expire at closing while others survive indefinitely or expire at different times following the closing.
How long does the indemnity last? For issues that are non-fundamental (not representative of the very core of the deal) there typically will be an end date to the indemnification. These clauses might expire 12-24 months after the deal closes.
Since a party might not become aware of these claims until after the contract termination, those indemnification provisions should survive termination. That way, a party faced with a claim months after contract termination still can pursue indemnification from the other party.
Indemnity insurance can last indefinitely, since it is tied to the property not the owners. Any new owners will continue to be covered. However, this may change if the property significantly increases in price.
