The South Carolina Supreme Court granted a petition for certiorari review in The Retreat at Charleston National Country Club Home Owners Association, et al. v. Winston Carlyle Charleston National, LLC, et al., a case with serious consequences for general contractor liability for subcontractor negligence.

NAHB filed an amicus brief with the HBA of South Carolina in the case to urge the Supreme Court to consider the case and emphasize how the Court of Appeals’ holding in the case would render standard contractual indemnification clauses unenforceable.

The underlying dispute concerns contract language between the general contractor and its subcontractors, which shifted liability for negligent construction to the subcontractors. These clauses use industry-standard language that is common in many home building contracts.

Before even reaching the merits of the case, the trial court held that the indemnification clauses were unenforceable, as they did not “clearly and unequivocally” shift liability for the general contractor’s own negligence to the subcontractors.

The general contractor in the case averred that it was not trying to hold the subcontractors liable for the general contractor’s negligence, but only for any negligence for which the subcontractor was responsible. The Court of Appeals affirmed the trial court’s ruling, applying the higher “clear and unequivocal” standard to the contracts.

If the Court of Appeals opinion is allowed to stand, it will have negative ramifications for builders in South Carolina. The opinion would shift the balance of liability toward general contractors and away from the subcontractors and tradespeople who are most directly involved with ensuring the work is not defective.

NAHB applauds the South Carolina Supreme Court’s decision to hear the case and will provide further updates as this matter progresses.