OSU PaCS 103-01: Indemnification/Tort Claims Act

Purpose

To limit the University’s liability by complying with the Tort Claims Act (ORS 30.260 – 300) and Article XI, section 7 of the Oregon Constitution.

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Applicability

1. Those individuals authorized to sign contracts and agreements on behalf of OSU, and
2. OSU staff who need to be aware of these limitations before working with Procurement and Contract Services (PaCS) to review a contract submitted by a supplier or contractor.

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Background

There are occasions when the need arises to enter into another party’s agreement or contract that may contain terms and conditions that obligate OSU to indemnify the other party from damage to life or property arising from the activity covered by the agreement or contract.  To agree to indemnify the other party usually exposes OSU to liability of more than $50,000 which is not permitted.  OSU cannot lend the credit of the state or create liabilities that exceed $50,000.

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Policy

OSU should not agree to indemnify or hold harmless a contractor or subcontractor.   If a contractor insists OSU indemnify them, then the person authorized to review and sign the contract must ensure the binding contract or agreement is modified so OSU only indemnifies the other party to the extent allowed by the Oregon Tort Claims Act and Article XI, section 7 of the Oregon Constitution, which is $50,000 or less.  The OSU Contracts Office will negotiate the appropriate indemnification language in contracts.

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Procedure

OSU staff involved with contracts or agreements that need reviewed should send those documents to PaCS with a cover letter identifying the requesting party along with other pertinent information that PaCS analysts should know before reviewing the document.

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Additional Information

See Chapter 30 - Actions and Suits in Particular Cases in the Oregon Revised Statutes.

See Article I Bill of Rights in the Oregon Constitution.

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