When Indemnitors And Indemnitees Jointly Cause A Loss

By Jeremy Lawrence, Munger Tolles & Olson LLP (April 21, 2017, 4:29 PM EDT) -- Often, contractual indemnification clauses require an indemnitor to pay the indemnitee's loss that is "caused by" the indemnitor's actions. What does this language mean when the indemnitor and indemnitee are jointly responsible for the loss? A recent decision from the California Court of Appeal, Oltmans Construction Co. v. Bayside Interiors Inc., shows how a simple modifying phrase — "to the extent" — can avoid the uncertainty created by less precise language.[1] Oltmans confirms that those three additional words unambiguously clarify that the indemnity obligation applies (or is reduced) only "to the extent" that each of the parties is responsible for causing the loss....

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