In our previous blogs, we have talked about how your responsibility and liability concerning an accident or injury can be based on the terms and clauses in your subcontract or prime contract. But, it’s important to note that your contract isn’t the only thing you need to be aware of. Sometimes your responsibilities or potential liability is governed by laws outside of your contract. In this blog, we’ll discuss safety statutes outside your contract that you need to be aware of.
Freedom of Contract Definition
In Texas, there is the freedom of contract, meaning you can agree to almost anything in a contract. In the absence of specific contract terms, your responsibilities or potential liability is governed by laws outside of your contract. Many of those laws come from the Occupational Safety and Health Administration (OSHA) propounded through regulations.
For example, OHSA has recognized this freedom of contract, that the prime contractor and any subcontractors may make their own arrangements with respect to certain obligations. OSHA gives the following example: the prime contractor and his subcontractors may wish to make an express agreement that the subcontractor will provide all required first-aid or toilet facilities. This would relieve the prime contractor from the obligation to perform this duty. However, OSHA has stated that this does not relieve the prime contractor of all legal responsibility.
OSHA has also put forth regulations stating the prime contractor or subcontractor shall still have the responsibility of compliance with the safety requirements of his part of the contract. In other words, even if your scope is small in relation to the entire project, you are still required to comply with all the safety standards present in the contract.
What does Prime Contract mean?
You need to be aware that many subcontracts incorporate the Prime Contract into the subcontract. But what does a prime contract do? If the Prime Contract has specific safety terms in it, you could be bound to those terms without realizing it. Further, to the extent that you, a subcontractor of any tier, agree to perform any part of the Prime Contract, you also assume responsibility for complying with standards laid out in OSHA’s regulations concerning that part of the Prime Contract.
In other words, if the prime contractor assumes the entire responsibility under the contract, the subcontractor also assumes responsibility for his portion of the work. With respect to subcontracted work, the prime contractor and any subcontractor or subcontractors shall be deemed to have joint responsibility unless the contract states otherwise.
In our next blog, you will learn about the relationship between safety and indemnification clauses. This blog is part of our 2020 Mastering the Subcontract series. Come back each week as we deep dive and pull apart everything you need to know about a subcontract.