No.

Subject

Traditional contract

Alliance contract

Material difference and trade-off between traditional contract and alliance contract

11

Liability

The Contractor indemnifies the Principal against:

loss or damage to property of the Principal; and

claims by any persons against the Principal in respect of personal injury or death or loss or damage to property,

arising out of the Contractor carrying out the work under the Contract.

The Contractor's indemnities are reduced proportionally to the extent that the Principal or Superintendent contributed to the loss, damage or claim.

In turn, the Principal indemnifies the Contractor against claims in respect of the right of the Principal to have the work under the Contract carried out.

The Owner (whether as the client for the Works or the Owner Participant) and the NOPs indemnify each other against loss or damage or claims suffered by them as a result of:

non-compliance with the insurance requirements of the alliance contract; and

any Wilful Default by the Owner or the NOPs (respectively).

The indemnities given by the Owner and the NOPs are reduced proportionally to the extent that the other Participant contributed to the loss or damage or claim.

Under a traditional contract, the Principal has the benefit of a broad indemnity from the Contractor.

Under an alliance contract, whilst the Owner and the NOPs each provide reciprocal indemnities, those indemnities are very much narrower in application than under a traditional contract. The reason for this is based on the no blame - no suit* principle meaning that the Participants agree that there will be no litigation or arbitration between them under the Agreement (except in limited circumstances).