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MDLaw
MDLaw, Attorney
Category: Business Law
Satisfied Customers: 6130
Experience:  Experience in business law, contract law and related matters.
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We are a caterer and our contract has a typical

Customer Question

we are a caterer and our contract has a typical indemnification clause. we have a non profit client who is saying that such a clause is not applicable to them due to their non profit status. We have done dozens of non profit contracts and have never had such a thing raised. This sounds like a strange reason.
Submitted: 1 year ago.
Category: Business Law
Expert:  MDLaw replied 1 year ago.

Hello and thank you for using the Just Answer website. I look forward to assisting you. Are you asking if they are correct? If yes, what is the actual language?

Customer: replied 1 year ago.
i am asking if they are correct that a indemnification clause doesn't apply to them because they are a non proft. here is what they wrote:
3. Indemnification clause should be stricken - see below - TEDC is a not for profit entity and is subject to applicable federal and state not for profit corporation laws
Expert:  MDLaw replied 1 year ago.

Thank you for the additional information. I need to, however, know the language of the clause before I can fully answer your question. Thank you.

Customer: replied 1 year ago.
here is the clause in our contract that is in questionINDEMNIFICATION CLAUSE
Each party shall indemnify, defend and hold harmless the other party, its directors, officers, employees, agents, members, parent company, partners, general partners, successors, assigns, predecessors, affiliates, and related companies from all liability, loss, damage, costs and all other claims for expenses asserted against any of them which may arise from injuries to persons occasioned by the intentional or negligent acts or omissions of the Client and its employees, guests, or invitees. The terms of this section shall survive the expiration or termination of this agreement.
Expert:  MDLaw replied 1 year ago.

The non-profit is incorrect. They appear to think that Texas' Charitable Immunity and Liability Act means that they are somehow exempt from all liability. That is simply not the case. The law is not a blanket exemption. There are many exceptions and loopholes.

The law only limits recovery for bodily injury and property damage. It does not limit other potential claims, such as libel, slander or discrimination. The law does not apply to the duties or liabilities of a board member or an officer to the organization or its members. Nor does the law prohibit plaintiffs from filing suit.

For example, the immunity provided by the statute and the limits on liability do not apply to an act that is intentional, willfully or wantonly negligent, or done with conscious indifference or reckless disregard for the safety of others.

The liability of the organization and its employees is limited to $500,000 per person and $1 million per occurrence for bodily injury and $100,000 for property damage. The limitation applies only if the organization carries liability insurance for the amounts stated. The requirement can be satisfied with a combined single limit of $1,000,000.

Furthermore, volunteers are personally liable for damage or injury arising from the operation or use of a motor vehicle, to the extent insurance coverage is required by the Texas Motor Vehicle Safety Responsibility Act, and to the extent of any existing insurance coverage applicable to the act or omission.

Thus, it is very smart for you to keep the clause in the contract.

Also, just to be clear, your question stated both Texas and Puerto Rico as the states and so I assumed in answering that the client is in Texas and that Texas law applies. If this is incorrect, please let me know.

Thank you for allowing me to assist you. Please let me know if this has answered your question. If it has, please be so kind as to leave me a positive rating as that is the only way that we experts get credited for the time spent assisting you. If, however, you need additional information, please let me know and I would be more than happy to keep our conversation going.

Expert:  MDLaw replied 1 year ago.

Hi, just checking in to see if my response answered your question. Hope all is well.

Expert:  MDLaw replied 1 year ago.

If I did fully and completely answer your question, please be so kind as to leave a positive rating.