HB Ad Slot
HB Mobile Ad Slot
The Importance of Indemnification Clauses in Managing Post-Completion Project Risk
Tuesday, May 13, 2025

Claims against design professionals often pose unique challenges when such claims are dually rooted in both tort and contract theories, and therefore subject to competing time limitations. In order to reconcile these differences, Massachusetts courts have historically looked to the “gist” of a given claim, rather than the label, to assess the appropriate limitations. A determination that the “gist” of a claim lies in tort will subject that claim to a shorter statute of limitations, as well as the statute of repose, which bars tort claims arising out of construction projects brought more than six years after the project is either completed or open for use.

The Massachusetts Supreme Judicial Court (SJC) recently addressed the statute of repose in this context in the matter of Trustees of Boston University v. Clough Harbour & Associates LLP. Docket No. SJC-13685 (Mass. Apr. 16, 2025). There, the SJC held that the six-year time limitation set forth in the tort statute of repose, Mass. Gen. Laws c. 260, § 2B, did not apply to bar a contractual indemnification claims for damages allegedly caused by an architect’s negligence. The decision arose out of a dispute concerning alleged defects in the design and construction of a brand-new synthetic turf athletic field on Boston University’s campus. In 2012, the university entered into a contract with the architect for design and construction administration services, which included an indemnification provision, providing that the architect would indemnify the university for any and all expenses caused by the architect’s negligence. The work was completed, and the field opened for use in the summer of 2013.

After experiencing numerous problems with the field after opening, the university demanded indemnification from the architect for costs spent remedying the issues pursuant to the parties’ contract. The architect refused, and well over six years after the field opened, the university sued for contractual indemnification. The architect was ultimately granted summary judgment by the Superior Court, which reasoned that because the indemnification obligation was contingent on the architect’s negligence, the gist of the claim was actually rooted in tort and therefore time barred by the statute of repose. The university appealed, arguing that its indemnification claim was based on distinct, express contractual obligations specifically negotiated and agreed to by the parties, and therefore did not fall under the ambit of the statute of repose.

The SJC agreed with the university. In resolving the question, the SJC noted that a key distinction between actions of contract versus those of tort is that contract actions are based on express promises set by the parties, as opposed to tort standards imposed by law. Thus, notwithstanding the parties’ decision to incorporate the negligence standard into the indemnity provision, the indemnification obligation still represented a distinct contractual promise, the breach of which requires a different showing than for negligence. With its findings, the SJC reversed the lower court and restored the contractual indemnification claim thus underscoring the importance of contractual indemnification clauses in managing project risk.

Although the SJC’s decision is generally consistent with a “gist of the claim” evaluation, it nevertheless suggests a departure from prior applications that may pose far-reaching effects for the construction industry moving forward. Though the Court found that the university’s indemnification claim was not barred by the statute of repose, it also confirmed that, for an owner to prevail on its claim, it must show, amongst other things, the occurrence of an event triggering the duty to indemnify. Assuming that a finding of negligence against the architect is the necessary trigger for purposes of the university’s claim, it seems that a paradoxical procedure has been created, wherein the university, to prove an element of its viable indemnification claim, will first need to prove a time-barred negligence claim. The impact of such a paradox remains to be seen.

HTML Embed Code
HB Ad Slot
HB Ad Slot
HB Mobile Ad Slot
HB Ad Slot
HB Mobile Ad Slot
 
NLR Logo
We collaborate with the world's leading lawyers to deliver news tailored for you. Sign Up for any (or all) of our 25+ Newsletters.

 

Sign Up for any (or all) of our 25+ Newsletters