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gordies gordies
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6 years ago
Limitation of Liability. Patricia Elsken leased an apartment in a large apartment complex. She signed a Residential Alarm Security Agreement in which she agreed to have security services provided by Network Multi-Family Security Corp The contract contained a clause limiting Network's liability to 250 for any injury or damage caused by a failure of the alarm service or by Network's negligent performance. The agreement stated, in all capital letters, that Network was not an insurer and that resident assumes all responsibility for obtaining insurance to cover losses of all types. The agreement also provided that Resident may obtain from Network increased liability by paying an additional charge directly to Network. Network received an alarm signal indicating intrusion into Elsken's apartment at 10:33 A.M. on April 11, 1988. Network called Elsken's apartment and, receiving no answer, called the apartment manager instead of going to Elsken's apartment. The manager told Network to disregard the alarm. Later that day, Elsken was found dead in her apartment, the victim of an apparent homicide. The administrator of Elsken's estate brought an action for damages against Network, alleging negligence. Will the court hold that the contractual limitation of li-ability for personal injury is valid and enforceable? Discuss.
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6 years ago
Limitation of liability
The court pointed out that state statutes specifically prohibited contract clauses purporting to exempt parties from liability for the consequences of their own willful acts, including negligence, but held that a clause purporting to limit the parties' liability may be valid and enforceable. The court explained that the clause would be valid as long as the parties dealt at arms length and the agreement was properly executed. Reasons for enforcing such clauses in residential burglar alarm services contracts include that the security company is not an insurer, the extreme difficulty of predicting the nature and extent of any loss, the difficulty or impossibility of ascertaining what portion of any loss sustained is attributable to the alarm company's failure to perform, and the uncertain nature of occurrences that might cause injury or loss.
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