Hold Harmless Clauses: What They Mean and Why They Matter
What Is a Hold Harmless Clause?
A hold harmless clause is a contract provision where one party agrees not to hold the other party responsible for certain risks, damages, or liabilities. In essence, you are agreeing not to sue or blame the other party if something goes wrong within the scope of the clause.
Hold Harmless vs. Indemnification
Though often used together ("indemnify and hold harmless"), these concepts are distinct:
- Hold harmless: A promise not to hold the other party liable — it is defensive in nature
- Indemnification: A promise to cover the other party's losses — it is affirmative in nature
Some courts treat them identically, but others recognize the distinction. Using both terms together provides broader protection.
Three Types of Hold Harmless Clauses
- Broad form: Party A holds Party B harmless even for losses caused by Party B's own negligence. This is the most protective for Party B and the riskiest for Party A. Several states prohibit broad form hold harmless clauses, particularly in construction contracts.
- Intermediate form: Party A holds Party B harmless except for losses caused solely by Party B's negligence.
- Limited (comparative) form: Party A holds Party B harmless only for losses caused by Party A's own negligence. This is the most balanced.
Where You See Hold Harmless Clauses
- Lease agreements (tenant holds landlord harmless)
- Service contracts (client holds contractor harmless)
- Event participation waivers
- Construction contracts
- Gym memberships and recreational activities
Red Flags
- Broad form clauses that make you responsible for the other party's negligence
- Hold harmless combined with a waiver of your right to sue
- No limitation on the types of claims or losses covered
- Applied in a context where the other party has significantly more control over the risk
- The clause covers intentional misconduct, not just negligence
When to Consult a Lawyer
Consider consulting an attorney if you are asked to sign a broad form hold harmless clause, if the clause covers the other party's own negligence, or if you are unsure about the financial exposure it creates. Some states restrict or void certain hold harmless clauses by statute.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.