Limit of Liability

I was hired to review a home and an inspection report (ashi member) which was a true pleasure :), but in doing so I also was able to review the contract being used. The following was incredible.

Which is it?!
I’m not liable for anything or I’m only liable for the cost of the inspection.

I have removed my own limit of liability in the last month because increasingly it has left a bad taste in my mouth, but this one blows my mind! We discussed it a little while back, but I would welcome some more thoughts on the issue.

Why would you remove it? Did you send an updated copy of your inspection agreement to your E&O provider?
Illinois limit of liability appellate court ruling

Because I increasingly saw it as an unbalanced contractual clause which leaves my client high and dry if I am responsible for an issue. I couldn’t, in good conscience, tell my client I’m giving them a thorough, quality inspection and then turn around and not stand behind my service.

I hear some inspectors on here even specifically advise other inspectors to lean on that clause when they are responsible for missing something. In nearly ten years I have had never needed that clause. I have an arbitration clause which I have used once. Every other call back was something small(<$100) so I just take care of it.

Why have it if it doesn’t represent how you want to do business?

I removed mine as well. Inspectors love to complain about low fees, but don’t want to take any responsibility.

Is your E&O carrier is aware of you removing this clause?

What would a fair time of limitation be? Just what responsibility should I have for a 12 year old dishwasher?

I don’t see a conflict there Cameron. The inspector assumes zero responsibility for a list of particular things… and limits the total responsibility for everything to an amount.


But the list of particular things is not limited, it just say “any unreported”. That’s potentially everything. If this were enforceable, couldn’t he hand the clients a blank piece of paper and claim “that is my report, good luck getting your fee back”?

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Ohh wait. I think I got it.

So he is saying:

  • I am only responsible for stuff I reported on up to the fee for the inspection and…
  • I take no responsibility for anything I didn’t report on.

He may not mean to make it come across like this but the latter sounds like “It doesn’t matter if I fail to report a defect, scratch my butt for 3 hours and go home or decide I just don’t wanna inspect something, I’m not responsible for it if I don’t report on it.”

That’s insidious.

Against my lawyers consult (several years ago), I plan to remove mine as well.

According to the Lawyer, and a judge, it is not enforceable in a TN court.

That being said; my lawyers thinks it might deter complaints. But if you make it to court and they wouldn’t consider it, I think you don’t need that first strike against you.

Gives the perception you think you can get away with this stuff, when in fact you can not (here).

I agree with you, Nick.

Even insurance companies limit their liability.

Furthermore, insurance companies, Mark Cohen, and Joe Ferry will all tell you that the bulk of their claims are regarding defects that we reported, not failed to report. I know, it’s nuts.

I limit my liability but operate as if I don’t. Meaning, if someone calls me with an issue, I solve it. I have had only had 2 calls all year. I handled both issues with little cost. I simply don’t debate these things with people. I get it done. People expect you to argue and try to not take responsibility. It was funny in one of the cases, because the people kept making their case even after I said I would take care of it. We went in, squared things away and that was it. I don’t play. But I also try to be aware of those who try to take advantage of people. I have had a few of those customers as well. People lie. Specially, when it comes to money. Even the nicest people.

I have actually seen a judge literally toss it (the service agreement) in the trash. I would have to say that the law begins on the side of the consumer.