1. A. Except as required by State or federal law, a State contract may not include the following:

   1. (1) A provision that requires the State to indemnify, defend, or hold harmless another person without an appropriation of State funds for that purpose;
   2. (2) A provision by which the State agrees to binding arbitration or any other binding extrajudicial dispute resolution process;
   3. (3) A provision that names a jurisdiction or venue for any action or dispute against the state other than a court of proper jurisdiction in the State;
   4. (4) A provision that requires the state to agree to limit the liability for any direct loss to the State for bodily injury, death, or damage to property of the State caused by the negligence, intentional or willful misconduct, fraudulent act, recklessness, or other tortious conduct of a person or a person’s employees or agents or a provision that would otherwise impose an indemnification obligation on the State;

   5. (5) A provision that requires the State to be bound by a term or condition that:

      1. (a) Is unknown to the State at the time of signing a contract;
      2. (b) May be unilaterally changed by the other party; or
      3. (c) Is electronically accepted by a State employee without authority;
   6. (6) A provision that provides for a person other than the Attorney General of Maryland to serve as legal counsel for the State, unless provided under State Government Article, §6–106, Annotated Code of Maryland;
   7. (7) A provision that is inconsistent with the State’s obligations under General Provisions Article, §§3 or 4, Annotated Code of Maryland;
   8. (8) A provision prohibited under State Finance and Procurement Article, §7–237, Annotated Code of Maryland;
   9. (9) A provision for automatic renewal that obligates the State to allocate funding in subsequent fiscal years; or
   10. (10) A provision that limits the State’s ability to recover the cost of a replacement contractor.
2. B. If a State contract contains a provision listed under §A. of this regulation, the provision is void from the beginning and the contract containing that provision shall be enforceable as if it did not contain the provision.
3. C. A State contract that contains a provision listed under §A of this regulation shall be governed by and construed in accordance with State law, notwithstanding any term or condition to the contrary in the contract.

Authority: State Finance and Procurement Article, §2-901, Annotated Code of Maryland

Effective date: March 3, 2025 (52:4 Md. R. 221)