Senate Bill S4507

                                 BILL NUMBER:  S4507

 TITLE OF BILL :  An act to amend the general obligations law, in
relation to voiding exemptions from liability


 PURPOSE : To provide that any contract provision which exempts a
party from liability for negligence shall be deemed void and
unenforceable except where state statute or federal or international
law specifically provides otherwise. The unenforceability of such
provision shall not affect the validity or enforceability of other
provisions of the covenant, contract or agreement in which the
unenforceable provision is contained.

 SUMMARY OF PROVISIONS : This bill amends the general obligations law
by adding a new section 5-335 to provide that any provision contained
in any covenant, agreement or understanding which exempts a party from
liability from damages caused by or resulting from the negligence of a
party shall be deemed to be void as against public policy and wholly
unenforceable unless state statute or federal or international law
specifically provides otherwise.

 JUSTIFICATION : Exculpatory provisions in a contract, purporting to
insulate one of the parties from liability resulting from that party's
own negligence, although disfavored by the law and closely scrutinized
by the courts, generally are enforced.  GROSS V SWEET, 49 NY2d 102.
              

Numerous statutory provisions, however, have been adopted to prohibit
exemptions from liability in certain contracts. For example,
agreements exempting caterers (G.O.L. Section 5-322), maintenance
contractors (G.O.L. Section 5-323), and gymnasiums (G.O.L. Section
5-326) from liability for negligence are void and unenforceable.
Similarly, a contract which grants an exemption from liability for
willful or grossly negligent acts is void. This legislation continues
the trend against contracts that contain exculpatory clauses and
provides that all such provisions are void unless state statute or
federal or international law specifically provides otherwise.

In LAGO V. KROLLAGE, 78NY2d 95, the Court of Appeals held that a
mechanic did not get the benefit of G.O.L. § 5-326 because the
defendant was not technically an owner of a place of amusement.
Although § 5-326 was designed to protect individuals negligently
injured at speedways and other places of public amusement, the LAGO
decision highlights its limited effectiveness. Since the defendant did
not meet the technical requirements of the statute, the plaintiff was
barred from recovery because of a hold harmless provision in his
contract. It is unfair and inconsistent to deem exculpatory contracts
void and unenforceable in certain instances and not others.

 LEGISLATIVE HISTORY :
2007-08: A.407 - Passed Assembly
2005-06: A.1242 - Passed Assembly
2003-04: A.4826 - Passed Assembly
2001-02: A.374 - Passed Assembly
1999-2000: A.295 - Passed Assembly

 FISCAL IMPLICATIONS : To be determined.

 EFFECTIVE  DATE :  This  act  shall take effect immediately and shall
apply to contracts entered into on or after such effective date.