A.R.S. 32-1159: When Indemnity Clauses Are Void in Arizona Construction Contracts

Construction and design contracts often shift risk from one party to another. A.R.S. 32-1159 sets a limit on that shifting. One party cannot use an indemnity clause to dodge the cost of its own sole negligence. This page explains what the section voids, how it differs from the home-only version, and why the wording matters before you sign with a builder or an architect.

What the statute voids

An indemnity clause is a promise by one party to cover, or "hold harmless," another party for certain losses. This section targets a narrow but common abuse of that promise. In a construction contract or an architect-engineer service contract, a clause that shifts the promisee's own sole negligence onto the other side is void. The operative words are direct:

...resulting from the sole negligence of the promisee ... is against the public policy of this state and is void.

The reach is wide by design. The statute defines a construction contract as an agreement to build, alter, repair, or improve land. It defines an architect-engineer service contract as an agreement for design, construction administration, studies, or other professional services tied to that work. So the rule covers the hands-on building contract and the design contract behind it.

How it differs from the home version (32-1159.01)

Arizona has a second, stricter indemnity rule for houses. A.R.S. 32-1159.01 applies to dwelling contracts and voids a clause that shifts the promisee's negligence, not only its sole negligence. That one word changes the protection. Under 32-1159, the shift is void only when the loss came from the promisee alone. Under the dwelling rule, the shift can be void even when fault was shared. If your project is a house, A.R.S. 32-1159.01 usually gives you the stronger footing. If the work is commercial, or you signed a separate design contract, 32-1159 is the section in play.

What it means for your build

Suppose you hire an architect directly for a custom home in Scottsdale, then hire a separate general contractor to build it. The design contract says you will indemnify the architect for any claim on the project. The architect specs the wrong footing for the lot's expansive clay soil, and the slab cracks. The mistake was the architect's alone. Under 32-1159, the clause cannot force you to pay for the architect's sole negligence, so that shift falls away.

The rule guards the other direction too. A general contractor cannot write a subcontract that makes a framer eat the cost of the contractor's own sole mistake. Read every hold-harmless line before signing. A clause that asks you to cover "any and all claims" is worth a second look, because part of it may be unenforceable.

How this connects to other rules

This section sits with the other contract rules in Article 5. A.R.S. 32-1158 lists what your written contract must contain, while 32-1159 polices a term it cannot enforce. For houses, pair it with the dwelling version above. The fault question it turns on is the same one behind many construction defect claims. Licensing still frames the deal: your builder must hold a valid contractor's license under A.R.S. 32-1151. For drafting help, see what to include in a custom home contract and cost-plus vs fixed-price contracts.

Full text and source

Read the current section, including the full definitions, on the legislature's site: View A.R.S. 32-1159 on azleg.gov. For a plain overview of what indemnity means, the Cornell Legal Information Institute keeps a short entry.

One word does the work here: "sole." Before you lean on 32-1159, check whether your project is a dwelling, because the home rule in 32-1159.01 can strike more of the clause than this general version does.