Contractual Risk Transfer in a Comparative Negligence Jurisdiction - by Bret McCabe & Michael Brinn

 

 

In New York, the doctrine of pure comparative negligence allows a party to recover damages even if they are partially or even mostly at fault. A plaintiff’s damages are reduced in proportion to their share of responsibility. This principle has important consequences when drafting indemnification clauses in construction contracts, where parties routinely seek to shift risk downstream.

Owners typically attempt to transfer liability to general contractors (GCs), who then seek to pass that risk to subcontractors. However, contractual risk transfer has limitations under New York law. Specifically, General Obligations Law §5-322.1 renders unenforceable any indemnification provision in a construction contract that attempts to hold one party responsible for another party’s own negligence. This applies even when the negligence is partial and even if the contract states otherwise.

As a result, broad indemnity provisions that require a subcontractor to indemnify a GC or owner for “any and all claims” may be struck down if they extend to claims involving the indemnitee’s own fault. Courts will not enforce indemnification language that conflicts with the statutory prohibition, regardless of the parties’ intent or bargaining position.

To comply with New York law and preserve enforceability, indemnity clauses must be narrowly drafted to align with principles of comparative fault. Effective language typically limits indemnity obligations to losses or claims “to the extent caused” by the indemnifying party’s negligence. This approach allows parties to allocate risk appropriately while staying within statutory bounds.

Ultimately, contractual risk transfer in New York must account for both comparative negligence and the statutory limits on indemnification. Proper drafting ensures that risk is allocated fairly and that indemnity provisions will hold up when it matters most.

Bret McCabe is a partner at Forchelli Deegan Terrana LLP in Uniondale. He is a member of the firm’s Construction and Litigation practice groups.

Michael Brinn is a 2025 summer legal intern at the firm. He is a student at the Benjamin N. Cardozo School of Law.