What is Contribution?
Contribution arises in situations where the defendants are jointly and severally liable. This means that both of the defendants are liable to the plaintiff for all of the plaintiff’s damages. When multiple parties are liable, the trier of fact will allocate responsibility to each party.
A defendant can seek contribution from another defendant who was also negligent when a defendant compensates the plaintiff for more than the defendant’s share of responsibility. This essentially means that the defendant paid the plaintiff more than her fair share and is asking another defendant to reimburse her.
Why does Contribution Exist?
The right to seek contribution from a co-defendant originated as a concept of equity. Joint and several liability can require a defendant to pay the plaintiff a sum that is not in proportion with the defendant’s responsibility. The theory behind contribution is that a defendant should not have to pay more than a just and fair amount of damages. It would not be fair to hold the defendant responsible for damages that the defendant did not cause.
When is Contribution Allowed in Texas?
In Texas, defendants can seek contribution in tort actions. Contribution does not apply to contract or warranty claims. See 14 Tex. Jur. 3d Contribution, Etc. § 3.
What is an Indemnity Provision?
An indemnity provision is a promise to hold a party harmless for future liability.
Indemnity is essentially a shift in responsibility from one party to another party. If a defendant that is indemnified pays the plaintiff any damages, the defendant can recover all of these damages from the party than indemnified the defendant.
Texas courts will enforce unambiguous indemnity provisions in contracts as long as the provision does not violate the constitution or a statute, and does not violate public policy.
How is Contribution different from Indemnity?
Contribution involves a situation where the defendants share liability for the plaintiff’s damages. Indemnity involves a shifting of all liability from one defendant to another defendant. The party that is indemnified recovers all of the damages that the indemnified party paid to the defendant.