Sec. 11.15.31.17. Limitation of Liability and Indemnification

A. Limited Scope of Contractor Duties to the Administration.

(1) Accuracy and Completeness. A contractor:

(a) Shall receive and transmit information, completely and without change, to and from the Administration's databases to participants;

(b) Does not guarantee the accuracy of information transmitted without change to and from the Administration, regardless of the actual accuracy of the content of the information so transmitted; and

(c) Has no duty to make inquiry regarding the actual accuracy of any information.

(2) Electronic Funds Transfers.

(a) A contractor shall promptly transmit all funds, remitted by participants, to the State Treasurer's account as required under Regulation .09 of this chapter.

(b) A contractor shall promptly correct any reported or discovered error or omission it makes relating to an electronic fund transfer.

(c) A contractor remains responsible for funds that are collected and remitted by the participant for transfer pursuant to Regulation .09 of this chapter.

(3) Vehicle Registration Materials.

(a) The participant is solely responsible for:

(i) Its issuance of vehicle registration materials; and

(ii) The loss or misappropriations of vehicle registration materials while vehicle registration materials are in its possession.

(b) A contractor is solely responsible for the vehicle registration materials from the time they are delivered by the Administration to the contractor until the time they are delivered by the contractor to the participant.

B. Limitation of Liability. This section and §§C-F of this regulation are to be read and construed in conjunction with §A of this regulation setting forth the limited scope of the duties of a contractor to the Administration. This section and §§C-F of this regulation do not broaden the scope of those duties or create any duty not otherwise explicitly imposed upon the contractor.

C. Liability of Contractor.

(1) A contractor is liable to the Administration for damages which are proximately caused by an act or omission of the contractor but is not liable for indirect, incidental, special, or consequential damages to third parties except as provided in §H of this regulation.

(2) The contractor is not liable to the Administration for any claims, losses, damages, judgments, liabilities, or similar costs and expenses resulting directly or indirectly from the misappropriation or misuse of a vehicle record obtained from the Administration by a participant by way of the program, including, without limitation, any use or dissemination of information in violation of the restrictions upon use and disclosure imposed by General Provisions Article, §§4-101-4-601, Annotated Code of Maryland, or any corresponding regulations, except when the claims, losses, damages, judgments, liabilities, or similar costs and expenses result directly from:

(a) A failure on the part of the contractor or any of its officers, directors, employees, or agents to comply with the provisions of the agreement;

(b) A fraudulent or intentionally wrongful act or omission, relating to the program, on the part of the contractor or any of its officers, directors, employees, or agents; or

(c) Negligence on the part of the contractor or any of its officers, directors, employees, or agents.

(3) If a third party asserts a claim against the Administration, the State, or any employee of the Administration for injury or damages for which a contractor would owe the Administration indemnification, the contractor may claim any defense available to it under the Maryland Tort Claims Act.

(4) Third-party claims shall be absolutely limited to reimbursement of the actual loss suffered by the Administration or State with respect to a third-party claim.

D. Liability of Participant. A participant is liable for, and shall indemnify and hold harmless the Administration for:

(1) Misuse or misappropriation of a vehicle record or related information obtained from the Administration in connection with the program;

(2) Failure by a participant or its personnel to comply with the provisions of the program; and

(3) Failure to safeguard and limit access to vehicle records or for any damages resulting from the acts or omissions of the participant or its personnel relating to the titling and registration of vehicles.

E. Accuracy and Completeness of Filings.

(1) A contractor shall correct or complete in a timely manner any information, application, or other filing which is transmitted inaccurately or incompletely to or from the Administration's databases solely as a result of a malfunction, deficiency, or operational error in or with respect to the electronic system.

(2) A contractor may not be held liable to the Administration for any claims losses, damages, judgments, liabilities, or similar costs and expenses incurred by the Administration (whether in its own right or by virtue of liability on the part of the Administration to a third party) resulting directly or indirectly from inaccurate or incomplete information, application or other filing except when the claims, losses, damages, judgments, liabilities, or similar costs and expenses result directly from an act or omission relating to the program on the part of the contractor or any of its officers, directors, employees, or agents.

(3) The amount of any liability to the Administration arising under this section shall be limited by the provisions of §H of this regulation.

F. Force Majeure.

(1) A contractor:

(a) Shall use its best efforts to make the electronic system and related services available during the hours of service to be mutually agreed upon with the Administration; and

(b) Is not liable to the Administration, or considered to be in default, for a delay or failure to perform that results from any cause beyond its control, including, without limitation, any act of God, force majeure, natural or man-made disaster, riot, or act of war, foreign aggression, or civil insurrection.

(2) The Administration:

(a) Shall use its best efforts to make its databases available during the hours of the service agreed upon; and

(b) Is not liable to the contractor for any delay or failure to perform that results from a cause beyond its control, including, without limitation, any act of God, force majeure, natural or man-made disaster, riot, or act of war, foreign aggression, or civil insurrection.

G. Acts and Omissions of Participant Not Attributable to the Contractor. An act or omission of a participant is not attributable to the contractor for the purpose of establishing vicarious liability on the part of the contractor for any damages (whether direct, indirect, special, or consequential) alleged to have arisen from the act or omission, nor shall the contractor bear any liability with respect to the act, omission, or damages alleged to have been related thereto, unless the contractor, its officers, agents, or employees knew or should have known of this act or omission.

H. Limited Indemnification.

(1) A contractor shall defend, indemnify, and hold harmless the Administration for all claims, losses, damages, liabilities, or similar costs and expenses incurred by the Administration as a result of third-party claims against the Administration which arise out of acts or omissions of the contractor with respect to which the contractor:

(a) Bears a duty explicitly set forth in §A of this regulation; or

(b) Has explicitly consented to assume liability pursuant to the provisions under §§B-F of this regulation.

(2) The amount of indemnification by a contractor with respect to any one transmission or occurrence is limited to reimbursement of the actual loss suffered by the Administration for all claims, losses, and damages.

(3) A participant shall indemnify both the contractor and the Administration for and against any and all claims, losses, damages, judgments, liabilities, or similar costs and expenses which arise in whole or in part out of acts or omissions of the participant with respect to the program or the application of laws restricting access to and disclosure of vehicle records available through the program, including, without limitation, reasonable attorney fees and all other costs of defending the action or claim.