HOUSE BILL 1092

48th legislature - STATE OF NEW MEXICO - first session, 2007

INTRODUCED BY

Richard D. Vigil

AN ACT

RELATING TO INDEMNITY AGREEMENTS; LIMITING INDEMNIFICATION PROVISIONS FOR CERTAIN LEASE AND RENTAL CONTRACTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. A new Section 56-7-3 NMSA 1978 is enacted to read:

     "56-7-3. [NEW MATERIAL] LEASE OR RENTAL CONTRACT FOR GOODS OR EQUIPMENT--CERTAIN AGREEMENTS VOID.--

          A. A provision of a lease or rental contract or an agreement for the lease or rental contract of goods or equipment that requires a party to the agreement to indemnify, hold harmless, insure or defend the other party to the agreement, including the other party's officers, employees or agents, against liability, claims, damages, losses or expenses, including attorney fees, arising out of bodily injury to a person or damage to property caused by or resulting from, in whole or in part, the negligence, act or omission of the indemnitee, its officers, employees or agents, is void, unenforceable and against the public policy of this state.

          B. A lease or rental contract for goods or equipment may contain a provision that requires one party to the contract to indemnify, hold harmless or insure the other party to the contract, including its officers, employees or agents, against liability, claims, damages, losses or expenses, including attorney fees, only to the extent that the liability, damages, losses or cost are caused by or rise out of the acts or omissions of the indemnitor or its officers, employees or agents.

          C. As used in this section, "lease or rental contracts for goods or equipment" means any public, private, foreign or domestic contract or agreement relating to the temporary use of goods or equipment without transfer of ownership of the goods or equipment from one party to the other.

          D. As used in this section, "indemnify" or "hold harmless" includes any requirement to name the indemnified party as an additional insured in the indemnitor's insurance coverage for the purpose of providing indemnification for any liability not otherwise allowed in this section.

          E. Nothing in this section shall apply to a lease or rental contract for a motor vehicle as defined in Section 66-1-4.11 NMSA 1978 that is designed and used primarily to transport persons or property on a public highway.

          F. Nothing in this section shall apply to a finance lease as that term is defined in Section 55-2A-103 NMSA 1978."

     Section 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2007.

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