On April 16, 2025, the Massachusetts Supreme Judicial Court (the “SJC”) issued a decision concluding that a claim based on a negotiated contract providing for indemnification of damages caused by an architect’s negligence cannot be time barred under the statute of repose. The decision may noticeably impact negotiation and litigation of construction agreements going forward; parties in the construction industry need to pay careful attention to such provisions in their contracts.
In the case, Trustees of Boston University v. Clough, Harbour & Associates LLP[1], the defendant architect agreed to design a new athletic field for Boston University. As part of the agreement, the sophisticated parties negotiated an express indemnification provision pursuant to which the architect promised to indemnify the university for “any and all” expenses incurred by the university as a result of the architect’s “negligen[t]” design. The SJC noted that this provision is not part of the American Institute of Architects (AIA) Standard Form of Agreement Between Owner and Architect, AIA Document B101-2007 used by the parties.
When the university began to experience problems with the field after it first opened in 2013, it demanded, pursuant to the indemnification provision, that the architect indemnify it for the expenses. More than six years after the field opened, the university sued. The architect moved for summary judgment, relying on the statute of repose, and the Superior Court allowed the motion. Boston University appealed, and the SJC, recognizing the importance of the issue, took the case on direct appellate review, bypassing the Appeals Court.
The SJC noted that the statute of repose[2] provides an automatic, nearly inviolable bar to actions of tort for damages arising out of “any deficiency or neglect in the design, planning, construction or general administration of an improvement to real property” if brought more than six (6) years after the earlier of (1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of the possession for occupancy by the owner. The statute of repose does not, however, apply to contract actions; it is a limitation expressly applicable to actions of tort.
The SJC therefore analyzed whether the action, although styled a contract claim, was really one of tort. In its analysis, the court noted that it would look beyond labels to examine the “gist of the action” to determine whether the tort statute of repose bars the claim.
The court wrote that determining where the gist of a claim falls depends largely on where the standard of performance is derived from. In contracts, the standard of performance is set by the defendant’s promises, whereas in tort, it is set by law. For example, the court observed that it has previously determined that the tort statute of repose applies to a claim for breach of an implied warranty, since the duty is imposed by law, and that the elements for breach of implied warranty and for negligence claims are the same. In contrast, it cited Gomes v. Pan Am. Associates[3] as an example of a contractual indemnification clause upheld in spite of a negligence claim brought more than six years after the property opened for use, where the parties freely and intelligently entered into a comprehensive contract of indemnification.
Because in the Boston University case, the architect’s duty to indemnify the university was not one imposed by law, but rather, a promise to which the architect freely and intelligently chose to be bound, the SJC held that the gist of the action sounded in contract.[4] As a contract claim, the statute of repose could not apply, and the prior grant of summary judgment was reversed and remanded for further proceedings.
Importance of the Decision
As specifically noted in the SJC’s decision, the type of indemnification provision at issue, which included an indemnity for negligence, is not found in the standard AIA form most often used in construction contracting. That may change moving forward, but unless and until it does, the weight of negotiating such a clause into that type of contract has taken on additional importance. The statute of repose has long been a powerful shield for those in the construction industry to fend off lawsuits arising many years after completion of a project. There are very few ways to sue around a construction claim that arises more than six years after the project is complete. This decision now adds a meaningful sword to the arsenal of property owners for use in combating those protections. Relevant here, while the statute of repose is a strict six year limitation from completion of the project, the six year breach of contract limitation period only begins to run from the time of breach; in this case, that occurred when the architect refused to indemnify the university. Having that statute of limitations tolled pending a breach gives significant life to contract claims arising long after the project is completed. Parties on both sides of such construction contracts will need to consider how to approach negotiating indemnification provision moving forward. If they are not careful, construction professionals could find themselves liable for damages occurring decades after a construction project is completed.
The Legislature’s response to the decision will be another intriguing area to watch. Caselaw is full of decisions noting the legislative intent in providing certainty and ironclad protections for construction professionals after six years, when they might otherwise forever be on the hook for latent defects in their work. Whether the Legislature takes action in response to this ruling remains to be seen; it may find that the SJC continued to honor its intent by only providing a carve out for those sophisticated parties willing to enter into a heavily negotiated indemnification provision, or it may feel that the loophole goes too far in adding pressure on construction professionals who may be forced to agree to provisions they would otherwise choose to reject. The Legislature’s response will be closely watched by the field.
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