Limited Liability

Limited liability stood the test here .

Enjoy and learn

Roy sr . RHI…Royshomeinspection.com

http://www.millerthomson.com/mtweb.nsf/wnd?readform&PageID=mtte6a9bsj

cid:part1.01040801.00020106@sympatico.ca

Français Printable version PDF version Insurance Newsletter, October 2003

Home Inspection

The liability of home inspectors in connection with home inspections undertaken for purchasers of residential homes was recently considered in the decision of Mr. Justice Coo of the Superior Court of Justice in John DiSanto vs. Amerispec Home Inspection Service. I had the privilege of acting for the defendant in this action.
In this action the plaintiff (purchaser) claimed that the defendant (home inspector) breached its contractual obligations in the way in which it conducted a home inspection. More specifically the plaintiff complained with respect to flaws and problems not seen, or at least not properly reported on, by the home inspector, despite the fact that they were all readily observable and accessible.
The plaintiff argued that had there been a proper report, he would have not have purchased the home, as the cost of required repairs would have put the real cost out of his reach. Accordingly, the plaintiff claimed the cost of the repair work to remedy the unreported problems.
Prior to conducting the inspection, the parties entered into a written inspection agreement which provided, among other things, that responsibility for observing and reporting on features or problems was limited to what could be seen.
The defendant argued that the inspection agreement limited liability to the return of the contract price paid by the plaintiff. The limitation clause in the agreement provided as follows:
“Limit of Liability–if we [the defendant], or our employees, inspectors, or any other person, you [the plaintiff], claim to be our agent, are careless or negligent in making the inspection and/or preparing the Report, our liability to you is limited to the fee paid for the inspection services and, any releases from any additional liability. There will be no recovery for secondary or consequential damages by any person. By signing this agreement, you agree to this limitation on our liability.” Additionally, in bold, centered and capitalized type, on the second line of the agreement the following words appeared:
THIS AGREEMENT LIMITS OUR LIABILITY - PLEASE READ IT.The plaintiff argued that he did not read the agreement and therefore was not bound by its terms. The court did not accept this argument and found that there was nothing to prevent the plaintiff from taking whatever time he might have required to read the agreement before signing. The court found that there was “nothing done by the inspector to inhibit that reading or to pressure the plaintiff.” Moreover the court found that the inspection obligations or limits on liability were in language that was readily understandable and in print that was readable. As such the agreement was not in a form that was in some way unfairly drafted or printed.
The plaintiff also argued that by the time the plaintiff arrived at the home site for the inspection, there was already an agreement between the parties made through a telephone conversation between the plaintiff’s real-estate agent and the home inspection service. The plaintiff therefore argued the agreement between the parties was an oral one and not governed by the terms of the written inspection agreement for which no further consideration was provided. The court did not accept this argument.
Although the court did find certain aspects of the inspection may have been performed negligently, the limitation clause precluded a finding of liability in excess of the cost of the inspection.

Quote:

"The plaintiff argued that he did not read the agreement and therefore was not bound by its terms. The court did not accept this argument and found that there was nothing to prevent the plaintiff from taking whatever time he might have required to read the agreement before signing. The court found that there was “nothing done by the inspector to inhibit that reading or to pressure the plaintiff.”

I like to get the agreement to the client before the inspection for this reason.:wink:

I find it curious that Amerispec gets in the news alot for this type if thing.Something suggests to me that there is a lack of education going on here. Maybe it is just the way this company goes about things.
Larry

The other franchise that seems to have its fair share of suits is P2P.

I would also strongly suggest that your contract be placed on your websites.

I try to get the contract to the buyer before the inspection and make a point of telling them to read it carefully. I have had people cancell inspections because they did not like the limitation of liability but that is great as far as I’m concerned, if they want an insurance policy they can try someone else.

If I can’t get the contract to them before the inspection I give it to them as soon as they arrive and tell them to take their time to read it.

Having the contract read and understood is number one as far as I’m concerned.

Damn! That made me feel good; a clear testament that that common sense prevails in Canada. Thank you, Roy.

Only sometimes , we can only hope it catches on every where all the time .

Roy Cooke sr… RHI…Royshomeinspection.com