construction contracts case study
- 1. CONSTRUCTION CONTRACT ADMINISTRATION CASE STUDY GOLDMAN V. ECCO-PHOENIX ELECTRIC CORP. 396 P.2D 371 (CAL. S.C. 1964) By: Mahmoud M.I. Sobeh
- 2. THERE IS A CONTRACT BETWEEN THE OWNER & GOLDMAN AS A PRIME CONTRACTOR . operating under the name Goldman agreed to indemnify the Owner for damage caused as a result of the construction , as one of the terms of the contract.
- 3. THERE IS A SUBCONTRACT BETWEEN GOLDMAN(CLOVIS) & SUB-CONTRACTOR (ECCO-PHOENIX ELECTRIC CORP). Ecco-Phoenix Electric Corp. The subcontract incorporated by reference the terms of the prime contract into the subcontract. (term number). Clovis argued that the Ecco-Phoenix Electric Corp therefore assumed this indemnity obligation.
- 4. An indemnification agreement calling for financial protection against one’s own negligence cannot rest upon language so loose and obscure as that of the instant contract The provision would only apply if the injury resulted solely from Ecco’s negligence. THE COURT HELD:
- 5. QUESTIONS 2 How could the indemnity have been drafted so as to be enforceable ?? 1 Why was the court reluctant to find that the indemnity applied to these facts ??
- 6. ANALYSIS It was included in the subcontract by reference only, rather than directly, which cast some doubt on whether the subcontractor knew it was taking on that risk. 1 Why was the court reluctant to find that the indemnity applied to these facts ??
- 7. ANALYSIS If the provision explicitly stated that the subcontractor agreed to indemnify the general contractor for its own negligence, and was receiving consideration for accepting that risk, it would have a greater likelihood of being upheld. 2 How could the indemnity have been drafted so as to be enforceable ??
- 8. This Photo by Unknown Author is licensed under CC BY-NC-ND