A Type II clause provides that the subcontractor compensates the general contractor for liability, without expressly specifying that it covers the negligence of the general contractor. For example, the clause may promise compensation against liability, „no matter how it may be caused; or „resulting from the use of premises, facilities or services of;” or „which may result from agreed work,” or „caused by equipment or condition, maintenance, possession or operation or use of such work;” or „any damage to personal property resulting from the use of the leased property.” Type III, also known as the General Compensation Clause, only requires damages if the negligence was caused by the compensation provider (here Metal Deck) and the negligence is not due to the active or passive negligence of the free sound (McCrary). Here, the general must be clean to get money from the subcontractors. An exemption contract or injury clause defines a method for transferring financial risks to a third party through a written contract. It lists all the parties involved, the situations covered and the party or party that will assume the risk. To explain a compensation agreement, it is first necessary to define the concept of „compensation”. Compensation is defined as „the obligation to obtain losses, damages or liabilities incurred by another (Black`s Law Dictionary). Compensation has the general importance of „keeping it unscathed,” i.e., one party considers the other to be harmless for loss or damage. Some changes in meaning for the concept of „compensation”: the parties to the construction contract cannot renounce the provisions of the new law. However, contractual provisions, clauses, agreements or agreements that are not expressly prohibited may continue to be the subject of agreement between the parties to a construction project. In addition, a subcontractor and contractor may consent to each other on the date or immediacy of the defence and the provisions relating to the reimbursement of defence costs and costs, provided that this agreement does not waive or amend the new provisions in the event of a final liquidation of the claims.
Here is how the court describes the three types of compensation rules: Type I sees explicit compensation for compensation (here McCrary) despite McCrary`s active negligence. This particularly bad provision makes the subcontractor an insurance company for the contractor and will no longer be applicable after January 1, 2006 in California, after the Assembly Bill 758 comes into force and the Civil Code Amendment Act 2782. Many high-risk activities, such as skydiving or heliskiing, require individuals to sign a compensation contract before they can participate. This protects the company or company from liability in the event of an accident. In Crawford v. Weather Shield (2008) 08 CDOS 9261 told the California Supreme Court: „We are verifying whether the provisions of a pre-2006 housing subcontract required the subcontractor to defend its compensation, the promoter of the ongoing actions against both parties, as the plaintiffs` remedies point to construction defects as a result of the subcontractor`s negligence. , even though (1) a jury ultimately found that the subcontractor was not negligent and (2) the parties accepted an interpretation of the subcontracting that did not grant the contractor the right to seek redress, unless the subcontractor was negligent.