Subsection (d)(5) provides that the act
will not apply to separately negotiated
provisions where the parties mutually
agree to a reasonable allocation of risk
based on “generally accepted industry loss
experience” and adequate consideration.
This provision was included in reaction to
testimony from the oil and gas industry
representatives concerning highly
specialized indemnity clauses called
‘knock-for-knock” provisions. Essentially
the industry representatives testified that
these provisions realistically allocated
the risk in certain types of contractual
relationships that exist in the oil and gas
industry. It is problematic whether this
exception will have any real effect outside
of the oil and gas industry, which, for the
most part, is not covered by the act in
any event. The thought by the legislators
who included this language was that if
industries whose contracts are covered
by this act want to come up with ways
to allocate the risks inherent in their
industry similar to what the oil and gas
industry did with “knock-for-knock”
indemnity provisions, they ought to have
the right to do that.
ensure that regardless of what a covered
contract says the provisions of K.S.A.
16-121 are is intended to apply to all
covered contracts performed in Kansas.
For example, it would not be uncommon
for an out of state contractor to enter into
a subcontract for work to be performed in
Kansas and for the subcontract to specify
the subcontract must be construed
under the laws of a state other than
Kansas. In Kansas these sorts of “choice
of law” provisions are generally valid
and enforceable and Kansas courts will
decide any claims that arise under the
subcontract in accordance with the laws
of the state specified in the subcontract,
unless there is a strong Kansas public
policy that is involved. Also some
contracts provide that an action under
the contract must be brought in a
specific state. These provisions, known
as “choice of forum” provisions, may also
be enforceable unless there is a strong
public policy to the contrary. The original
version of K.S.A. 16-121 provided not
only that prohibited indemnity provisions
were void and unenforceable, but that
they were void and unenforceable as a
matter