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11 Cumb. L. Rev. 183 (1980-1981)
Exculpation and Indemnification Agreements in Alabama

handle is hein.journals/cumlr11 and id is 191 raw text is: EXCULPATION AND INDEMNIFICATION AGREEMENTS IN ALABAMA For more than a century, Alabama courts have declared certain exculpatory clauses and indemnity agreements void as against public policy.' An exculpatory clause is an agreement providing that one party to a contract may not recover damages in the event that he is negligently injured by the other party.2 An indemnity provision, however, requires one of the contract- ing parties to protect the other from claims of third parties.' The purpose of both types of agreements is to relieve one of the parties from the consequences of tort liability that might be incurrred in the performance of the contract. The two types of agreements may be distinguished, however; exculpatory clauses preclude recovery by the injured party, whereas indem- nity agreements ordinarily shift the burden of paying the claim.4 A further distinction is found in the fact that exculpa- I See, e.g., Alabama Great S.R.R. v. Sumter Plywood Corp., 359 So. 2d 1140 (Ala. 1978); Mobile & O.R.R. v. Hopkins, 41 Ala. 486 (1868) (exculpatory clause); Steele & Burgess v. Townsend, 37 Ala. 247 (1861) (exculpatory clause); James v. Hendree's Adm'r, 34 Ala. 488 (1859) (indemnity agreement). I See Lewy, The Use of Exculpatory Clauses Affecting Real Property, Leases and Hold Harmless Agreements and the Insurance Implications Involved, 46 CHi. B. REc. 131, 131 (1964). The following is an example of an exculpatory clause: Neither the landlord nor any of its representatives or employees shall be liable for any damages to person or property of the tenant, or any member of tenant's family, or any of the tenant's visitors or licensees for loss from theft, or from any cause whatsoever. Housing Auth. v. Morris, 244 Ala. 557, 561, 14 So. 2d 527, 529 (1943). ' See Lewy, supra note 2, at 131. An example of an indemnity provision is found in Black Warrior Elec. Membership Corp. v. Mississippi Power Co., 413 F.2d 1221, 1222 (5th Cir. 1969): The Grantee shall and will at all times hereafter, indemnify, protect and save harmless Grantor from any and all claims, loss, damage, expense, and liability which Grantor may incur, suffer, sustain, or be subjected to, result- ing from or in any way arising out of the construction, maintenance, or use of the wires, poles, and appliances of Grantee at such crossings. 4 Collins & Dugan, Indemnification Contracts-Some Suggested Problems and Possible Solutions, 50 MARQ. L. REV. 77, 82 (1966). See Jamison v. Ellwood Consol. Water Co., 420 F.2d 787 (3d Cir. 1970), wherein the court stated: The difference between [exculpatory clauses and indemnity provisions] is manifest and significant. A valid exculpatory clause precludes recovery by the victim of the negligence. In contrast, a valid indemnity provision in no way affects the victim's right of recovery. Rather, it merely determines who among the parties to the contract shall bear the ultimate cost of the victim's claim. Id. at 789.