Under the Texas express negligence rule, a contract clause that tries to shift liability for a party’s own negligence onto someone else is enforceable only if two things are true: the language clearly and unequivocally says so, and the clause is conspicuous on the page. Miss either prong and a Texas court will refuse to enforce the risk transfer, no matter what the parties may have intended. The rule comes from the Texas Supreme Court’s 1987 decision in Ethyl Corp. v. Daniel Construction Co. and shows up most often in construction, oilfield, and commercial lease contracts.1Justia. Ethyl Corp. v. Daniel Const. Co.
Prong One: Clear and Unequivocal Language
The words have to name what they are doing. Broad catch-alls like “any and all claims” or “all losses arising from the performance of work” do not pass. Texas courts treat that kind of phrasing as too vague to put the signing party on notice that it is agreeing to cover someone else’s mistakes.
To satisfy the first prong, the clause needs to reference the protected party’s negligence directly. A provision stating that the subcontractor will indemnify the general contractor “for the general contractor’s own negligence” clears the bar. General language that only implies the same result does not.
The Ethyl Corp. test also requires the clause to address whether the protected party’s negligence is the sole cause of the harm or a concurrent cause alongside the indemnitor’s own fault.1Justia. Ethyl Corp. v. Daniel Const. Co. Careful drafters use the word “negligence” more than once and spell out both scenarios so there is nothing left to argue about.
Prong Two: Conspicuousness
Perfect wording still fails if the clause is buried in a long document and formatted like every other paragraph. The Texas Business and Commerce Code defines a “conspicuous” term as one “so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it,” and makes conspicuousness a question for the court, not the jury.2State of Texas. Texas Business and Commerce Code Chapter 1 – General Provisions
The statute recognizes two formatting categories that satisfy the standard:
- A heading in capital letters equal to or larger than surrounding text, or in a contrasting type, font, or color.
- Body text in larger type than the surrounding text, in contrasting type, font, or color at the same size, or set off by symbols or marks that draw the eye.
All-caps is not required. Bold print, colored text, or a short document where the clause is hard to overlook can all meet the standard. A separate signature or initial line next to the indemnity clause can reinforce the argument that the signer actually saw it, but formatting has to do the real work.
When the Rule Applies
The express negligence rule is triggered only when a contract tries to shift liability for the protected party’s own negligence. If a subcontractor simply agrees to indemnify the general contractor for claims caused by the subcontractor’s own mistakes, the rule does not apply, because nobody is being asked to absorb responsibility for someone else’s fault.3Texas Courts. 14th Court of Appeals Opinion
Within its zone, the rule reaches broadly. It covers indemnity agreements, in which one party promises to pay the other’s losses, and pre-injury releases, in which one party waives the right to sue. It applies whether the protected party was the sole cause of the injury or only a contributing cause. The Ethyl Corp. decision was explicit that the language must address the protected party’s negligence “whether such negligence was the sole proximate cause of the injury or a proximate cause jointly and concurrently” with the indemnitor’s negligence.1Justia. Ethyl Corp. v. Daniel Const. Co.
What Happens if a Clause Fails
An indemnity provision that flunks the fair notice standard is unenforceable as a matter of law. The court decides the question as a matter of contract interpretation; it does not go to a jury.3Texas Courts. 14th Court of Appeals Opinion
The consequence is blunt. The clause cannot shift liability for the protected party’s negligence, and each party ends up bearing its own share of fault. The party that thought it had bought protection often ends up absorbing a damages award it expected someone else to cover. The clause may still work for claims that do not involve the protected party’s own negligence, but the risk-transfer piece is void.
Statutes That Void the Clause Even When It Passes
Getting the wording and formatting right is not always enough. Two Texas anti-indemnity statutes flatly prohibit certain indemnity-for-own-negligence arrangements no matter how carefully drafted.
Construction Contracts
The Texas Anti-Indemnity Act, in Chapter 151 of the Insurance Code, makes any construction-contract provision void and unenforceable to the extent it requires one party to indemnify another for claims caused by the other party’s own negligence or fault.4State of Texas. Texas Insurance Code Section 151.102 – Agreement Void and Unenforceable It also voids clauses that shift liability for the protected party’s statutory violations or its own breach of contract. The reach covers most construction work, including design, renovation, demolition, and equipment supply for improvements to real property.
Several categories fall outside the prohibition, including consolidated insurance programs, workers’ compensation benefits, surety bonds, loan documents, joint defense agreements entered after a claim is made, single-family homes, townhouses, duplexes, and municipal public works projects. In commercial construction, though, a subcontractor cannot be contractually forced to pay for the general contractor’s own negligence. The express negligence rule is beside the point in that setting because the statute eliminates the right to shift that risk at all.
Oil, Gas, and Mineral Agreements
Chapter 127 of the Civil Practice and Remedies Code applies a similar prohibition to agreements related to oil, gas, or water wells and mineral mines. A provision purporting to indemnify a party for personal injury, death, or property damage caused by that party’s sole or concurrent negligence is void.5State of Texas. Texas Civil Practice and Remedies Code Section 127.003 – Agreement Void and Unenforceable Its scope is narrower than the construction statute: it covers services performed on a well or mine, not the broader universe of oilfield activities like pipeline operation, gathering, or transporting production. Joint operating agreements are also excluded.
Chapter 127 does carry an important escape valve. It does not apply if the parties agree in writing that the indemnity obligation will be backed by liability insurance furnished by the indemnitor. Where insurance supports the indemnity, the provision can survive even though it covers the indemnitee’s own negligence.
Gross Negligence and Willful Misconduct
The express negligence rule addresses whether the language is clear enough. It does not settle whether every kind of fault can be shifted by contract. Texas public policy places limits here, and indemnification for a party’s own gross negligence or willful misconduct raises serious concerns even with meticulous drafting. Satisfying the fair notice test does not automatically mean every degree of fault is covered.
Drafting Checklist
The test is mechanical enough that getting it right should be routine, and yet clauses fail with regular frequency. The two most common mistakes are relying on broad language that plainly wants to shift negligence liability but never uses the word “negligence,” and formatting the clause like ordinary body text. A well-drafted clause does four things:
- Names the protected party’s negligence explicitly, using the word itself.
- Addresses both sole-cause and concurrent-cause scenarios.
- Stands out visually from surrounding text through bolding, capitalization, contrasting color, or larger type.
- Fits within, or works around, any applicable anti-indemnity statute.
Before finalizing any indemnity clause, check whether the contract falls under Insurance Code Chapter 151 or Civil Practice and Remedies Code Chapter 127.4State of Texas. Texas Insurance Code Section 151.102 – Agreement Void and Unenforceable5State of Texas. Texas Civil Practice and Remedies Code Section 127.003 – Agreement Void and Unenforceable Passing the fair notice test is pointless if a statute voids the provision anyway. For contracts outside those industries, the express negligence rule is the primary gatekeeper, and the penalty for getting it wrong is that the party who drafted the clause ends up holding the full weight of its own liability.