Actually this is a typical insertion in the insurance section of contract
language.  Whether or not you want to do this depends a great deal on 1) who
has most of the risk,  2) if waiving the right of subrogation is mutual,
and, mainly, 3) whether or not you insurer will issue a certificate of
insurance to them with that language in it.

What it really means is whether or not you retain the right to turn around
and sue them for damages resulting from activity on this contract.  You
definitely want to be able to do that if they have a risky product or
practice.  If it is routine (slip and fall) type risk, a mutual waiver would
probably work for everyone.  Ask you insurer.  They are the ones who would
or would not want to waive the right.

-----Original Message-----
From: Audrey Buck [mailto:xxxxxx@POBOX.UPENN.EDU]
Sent: Monday, May 07, 2001 8:55 AM
To: xxxxxx@HRINET.ORG
Subject: Re: [RESADM-L] Confusing contract clause

Ruth:

Do not buy into it!!!!   Subrogation is a legal fiction denoting that
change by which another person is put into the place of a creditor so that
the right and securities of the creditor pass to that person, who by being
subrogated to him enters into his rights (them).  The effect of subrogation
is that an obligation extinguished by a payment made by a third person is
treated as still subsisting for the benefit of that third person, so that
by means of it one creditor is substituted to the rights, remedies and
securities of another.  A mode which equity adopts to compel the ultimate
discharge of debt by him whi in equity and good conscience ought to pay it,
and to relieve him who none but the creditor could as to pay.

I took this out of my Legal Dictionary.  They need to be a bit forthcoming
with their language.  I would take this out and substitute it for language
that states they are obligated to make payment for services rendered.

Audrey

At 05:04 PM 05/02/2001 -0400, you wrote:
>Dear Colleagues,
>
>I need your help with the following clause in a subcontract from a
>for-profit (Them) to Lehigh (Us).  The clause is in the Insurance and
>Indemnification section.  What the heck does it mean?
>
>"To the extent permitted by law, Contractor [Us] and its insureres(s)
>agree that subrogation rights against Buyer [Them] are hereby waived.
>Contractor hereby undertakes to reflect such waiver in any policy(ies)
>required under this Agreement."
>
>Your clairvoyance will be greatly appreciated!
>
>Ruth
>
>Ruth Tallman
>Office of Research and Sponsored Programs
>Lehigh University
>526 Brodhead Avenue
>Bethlehem, PA  18015
>Phone:   (610)758-3024
>FAX:    (610)758-5994
>E-mail:   xxxxxx@lehigh.edu
>
>
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Audrey C. Buck
Senior Contract Administrator
Research Services
Phone:  (215) 573 6709
Fax:    (215) 898 9708
email:  xxxxxx@pobox.upenn.edu

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 subscription information and a web-searchable archive, are available
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