First look at it from a risk management point of view.

As the originator of the subcontract, you definitely want to specify what
liability your subcontractor must accept.  You would love it if you could
get them to indemnify you and hold you harmless, but that is unlikely to
happen for other universities, especially state universities.  You can try
it on commercial subcontractors.  And in particular, the "independent
contractor" or "independent agent" language is very important, to prevent
anyone having the idea that you, the prime, are responsible for what the
sub- does.  In fact, I would suggest independent "contractor" rather than
"agent" simply because someone might consider the latter an agency
relationship, which you do not want.

As the prime contractor, you will want to accept no more liability than for
your own acts of negligence.

On the other hand, when you are the sub, you definitely want the prime to
accept liability for its acts.

Now, from a research administration point of view, either of the clauses
you suggested is acceptable is you are the prime, but only the second if
you are the sub.

Chuck

At 09:52 AM 9/23/2004, you wrote:
>Does your standard subgrant agreement include a "Limits of Liability"
>paragraph that addresses the liability of each party or does it address
>the liability of only the subgrantee?
>
>Our standard subgrant agreement includes a "Limits of Liability"
>paragraph that addresses the liability of only the subgrantee:
>    "Subgrantee is and will be acting as an independent agent in the
>performance of this work, and it shall be solely responsible where found
>liable to the extent covered by the subgrantee's insurance for the
>payment of any and all claims for loss, personal injury, death, property
>damage, or otherwise arising out of any act or omission of its employees
>or agents in connection with the performance of this work."
>
>However,  I have seen liability paragraphs that address the liability of
>both parties:
>    "Each party will be liable for its actions resulting from errors of
>omission or commission that may result directly or indirectly from
>wrongful or negligent acts by its personnel."
>
>Is there a reason or are there circumstances under which we should use
>the "each party" version instead of the "subgrantee" version?
>
>If we are the subgrantee, should we negotiate for one type wording over
>the other, or doesn't it matter? Also, if you receive an agreement that
>does not include any liability paragraph, do you accept it or do you
>request that a liability paragraph be included?
>
>Laurie
>
>
>--
>Laurie Chamness
>Assistant Director
>Office of Research and Sponsored Programs
>Medical University of South Carolina
>PO Box 250854
>Charleston, SC  29425
>
>Ph (843) 792-3832
>Fax (843) 792-6447
>E-Mail:  xxxxxx@musc.edu
>
>
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Herbert "Chuck" Chermside, CRA
1915 Robindale Rd.
Richmond, VA 23235-3931
804-320-5502
xxxxxx@verizon.net

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