A.R.S. 32-1159.01: Void Indemnity Clauses in Arizona Home Contracts

One common contract trick shows up in Arizona home construction and design contracts: a clause that makes you pay for damage someone else caused through their own carelessness. A.R.S. 32-1159.01 shuts that trick down. Any term that shifts a party's own negligence onto the other side is void. This page explains what the rule blocks and why it protects everyone on a build.

What this statute says

An indemnity clause is a contract term where one party agrees to cover, or "hold harmless," another party for certain losses. A.R.S. 32-1159.01 says that in a construction contract or an architect-engineer professional services contract involving a dwelling (a home), an indemnity clause cannot force a party to pay for losses caused by the other party's own negligence. The statute treats that kind of clause as against public policy. Here is the operative language:

is against the public policy of this state and is void only to the extent that it purports to insure, to indemnify or to hold harmless the promisee from or against liability for loss or damage resulting from the negligence of the promisee.

Two details matter. First, the clause is void "only to the extent" it shifts the promisee's own negligence; the rest of the indemnity term can still stand. Second, "dwelling" takes its meaning from A.R.S. 12-1361, the Purchaser Dwelling Act, so this covers homes and their improvements, not commercial towers.

What it means for your home build

This rule keeps responsibility where it belongs: with the party whose mistake caused the harm. For example, suppose a contract says you, the homeowner, must indemnify your architect for any claim arising on the project. The architect then makes a design error that cracks a foundation slab on Arizona's expansive clay soil. Under 32-1159.01, the architect cannot use that clause to make you pay for their own negligent design. The void rule strikes that shift.

It cuts both ways and protects subcontractors too. A general contractor cannot write a subcontract that forces a framer to indemnify the GC for the GC's own negligence on a home. The legal name for the loss this section deals with is often tied to a construction defect claim, where the fight is over whose fault the failure was. Because indemnity language is dense, read it before signing, and treat any "you cover all claims" clause as a red flag worth a second look.

How this connects to other rules

This section sits alongside the other contract rules in Article 5. A.R.S. 32-1158 lists what your home contract must include, and 32-1159.01 polices what it cannot enforce. The negligence question it turns on is the same one behind many construction defect disputes, which Arizona handles through the Purchaser Dwelling Act in Title 12. Licensing still frames it all: under A.R.S. 32-1151 the builder must be licensed. For drafting a fair agreement, see what to include in a custom home contract and cost-plus vs fixed-price home contracts .

Full text and source

Read the current section, including the full list of exceptions and definitions, on the legislature's site: View A.R.S. 32-1159.01 on azleg.gov .

How the rule applies to a specific clause depends on the facts, so confirm details with a qualified professional before relying on it.