Nick - Agreement for Review

[dkutchin (Dan Kutchin)]

Thanks Nick for your assistance and offer to review - looking forward to feedback.

[gromicko (Nick Gromicko, CMI)]

I’ll re-post your agreement first:

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PRE-INSPECTION AGREEMENT****
[RIGHT][RIGHT] [/RIGHT][/RIGHT]
THIS AGREEMENT is made and entered into by and between HomeEx - The Home Examiner, LLC referred to as “Inspector”, and
___________________________________________________________________________________________________________, referred to as “Client”.
In consideration of the promise and terms of this Agreement, the parties agree as follows:

1. CONTRACT PRICE: The client will pay the agreed upon fee of __________ for the inspection of the “Property”, being the residence, and garage or carport, if applicable, located at**______________________________________________________________________________________________________________**.
2. SCOPE: The Inspector will perform a visual inspection and prepare a written report of the apparent condition of the readily accessible installed systems and components of the Property existing at the time of Inspection. Latent and concealed defects and deficiencies are excluded from the Inspection.
3. ACCEPTANCE: The proposal embodied by this document and any writings incorporated by reference (collectively, the “Agreement”) may be accepted by any definite and reasonable expression of acceptance. Acceptance is limited to the terms and conditions of the Agreement; no additional or different terms or conditions contained in any acceptance shall become part of the contract formed as a result of such acceptance. This Agreement may not be modified except by written agreement signed by a duly authorized representative of Inspector. Any provisions of Client’s purchase order or other document, which is inconsistent with the foregoing, shall be of no force and effect.
4. CONTRACT PRICE AND TERMS: The services to be provided by Inspector are limited to inspection of the aforementioned Property in this Agreement. Payment of the fee to INSPECTOR is due upon completion of the on-site inspection. Accounts past due shall be charged a late fee at a rate of 1.5% per month (or 1.0% per month if a “consumer transaction” as defined under applicable law), or the maximum amount permitted by law, from the date of invoice. To the extent permitted by applicable law, Client shall be liable to Inspector for all costs of collection, including but not limited to actual reasonable attorney fees, incurred by Inspector in connection with actions or efforts to collect any balance owed by Client.
5. GOVERNING LAW; JURISDICTION: This Agreement shall be governed by, and construed and enforced in accordance with, the laws of Wisconsin, exclusive of Wisconsin’s conflict of laws provisions. Any and all claims, questions or disputes regarding the interpretation performance and enforceability of this Agreement, the rights and remedies of the parties hereunder, and all related actions or counterclaims shall be initiated and or prosecuted exclusively in Outagamie County Circuit Court, Appleton, Wisconsin. The parties further agree to submit to the jurisdiction of said courts.
   Client has read this entire Agreement and accepts and understands this Agreement as hereby acknowledged, specifically the Terms and Conditions on the following page. The client also acknowledges receipt of a copy of the Wisconsin Department of Safety and Professional Services Chapter SPS 134 Standards of Practice.
   Client Signature:__________________________________________________________________________ Date: ________________________
   Current Street Address:________________________________________________________________________________________________________
   City/State/Zip or Postal Code: ____________________________________________________________________________________________
   Agent’s Name: ___________________________________________________________________________
   Inspector’s Signature: State of Wisconsin License No. 2549-106 NEHA ID 106666RT Date: _____________
   Dan Kutchin - On behalf of HomeEx - The Home Examiner, LLC

Client authorizes release of reports to seller/buyer/realtor: Yes _________ No_________ (circle all that apply and initial in space)
SEE NEXT PAGE FOR ADDITIONAL TERMS, CONDITIONS, AND LIMITATIONS

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Additional Terms, Conditions, and Limitations
6) STANDARDS OF PRACTICE: The Parties agree that the customary normal industry standards of practice (the “Standards”) shall define the standard of duty and the conditions, limitation and exclusions of the inspection and are incorporated by reference herein. If the State where the inspection is performed imposed more stringent standards or administrative rule, then those standards shall define the standard of duty and the conditions, limitations and exclusions of the inspection.
7) LIMITATION OF WARRANTY: The Parties agree and understand the Inspector is not an insurer or guarantor against defects in the structure, items, components or systems inspected. The Inspector will use best efforts to perform services in accordance with the Standards. INSPECTOR MAKES NO ADDITIONAL WARRANTIES WITH RESPECT TO THE SERVICES SOLD HEREUNDER. ANY IMPLIED WARRANTY OF MERCHANTABILITY, AND ANY IMPLIED WARRANTY THAT THE SERVICES ARE FIT FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED.
8) LIMITATION OF LIABILITY: Pursuant to Wis. Stat. § 440.976, no home Inspector may include, as a term or condition in an agreement to conduct a home inspection, any provision that disclaims the liability, or limits the amount of damages for liability, of the Inspector for his or her failure to comply with the standards of practice prescribed under this statute subchapter or in rules promulgated under this statute subchapter.
9) ENTIRE AGREEMENT: This Agreement is the entire agreement between the Parties with respect to the transaction contemplated herein and supersedes all previous written or oral negotiations, commitments and writings. No promises, agreements, representations or warranties with respect to said transaction have been made by any of the parties except as set forth herein.
10) BINDING EFFECT: This Agreement shall bind and benefit the parties and their respective personal and legal representatives, heirs, successors and permitted assigns.
11) AUTHORITY: Each Party warrants to the other Party that is has the authority to enter into this Agreement and that all necessary corporate or other approvals have been or will be obtained.
12) WAIVER: The failure of either Party to insist on strict performance of this Agreement by the other, according to the terms and understanding herein set forth, shall not be construed as a waiver of the right to insist on such performance and no waiver by either party of any breach by the other of any provisions hereof shall be deemed a waiver of any other prior or subsequent breach.
13) SEVERABILITY: Each provision of this Agreement shall be considered severable, and if for any reason any provision or provisions of this Agreement are determined to be invalid and contrary to any existing or future law, the invalidity shall not affect or impair the operation of those portions of this Agreement that are valid, or the application of such provisions in situations in which they are not invalid.
14) EXCLUSIVITY: The Inspection and report are performed and prepared for the sole and exclusive use and possession of the Client. No other person or entity may rely on the report issued pursuant to this Agreement. In the event that any person, not a party to this Agreement, makes any claim against Inspector, its employees or agents, arising out of the services performed by Inspector under this Agreement, the Client agrees to indemnify, defend and hold harmless Inspector from any and all damages, expenses, costs and attorney fees arising from such a claim.
15) APPRAISAL: The Inspection will not include an appraisal of the value or a survey. The written report is not a compliance inspection or certification for past or present governmental codes or regulations of any kind.
16) LIABILITY OF INSPECTOR: In the event of a claim by the Client that that there was some deficiency or flaw in the inspection, or an installed system or component of the premises which was inspected was not in the condition reported by the Inspector, the Client agrees to notify the Inspector prior to repairing or replacing such system or component, and to allow the Inspector to observe the problem firsthand, as it was discovered, without alteration or repair. The client further agrees that the Inspector is liable only if there has been a complete failure to follow the Standards adhered to in the report or State law. Pursuant to Wis. Stat. § 440.977, notwithstanding s. 893.54, an action to recover damages for any act or omission of an Inspector relating to a home Inspection that he or she conducts shall be commenced within two (2) years after the date of the original Inspection or be barred. The period of limitation may not be reduced by Agreement. An Inspector is not liable to a person for damages that arise from an act or omission relating to an Inspection he or she conducts if the person is not a party to the transaction for which the Inspection is conducted.
17) EXCLUSIONS: Notwithstanding any other provision, systems, items and conditions which are not within the scope of the Inspection include, but are not limited to, radon, formaldehyde, lead paint, asbestos, toxic or flammable materials, molds, fungi, other environmental hazards; pest infestation; security and fire protection systems; household appliances; humidifiers; paint, wallpaper and other treatments to windows, interior walls, ceilings and floors; recreational equipment or facilities; pool/spa water purification systems (ozone generator/saltwater, etc.); underground storage tanks, energy efficiency measurements; motion or photo-electric sensor lighting; concealed or private secured systems; water systems; water softener or purification systems; central vacuum systems; telephone intercom or cable TV systems; antennae, lighting arrestors, load controllers; trees or plants; governing codes, ordinances, statutes, and covenants; and manufacturer specifications and recalls. Client understands that these systems, items and conditions are excepted from this Inspection. Any general comments about these systems, items and conditions of the written report are informal only and DO NOT represent an Inspection.
18) INSURABILITY: This Inspection does not determine whether the property is insurable

[gromicko (Nick Gromicko, CMI)]

I don’t like this line in your agreement

Latent and concealed defects and deficiencies are excluded from the Inspection.

as it implies that all visible defects are included in the inspection.

[gromicko (Nick Gromicko, CMI)]

Your agreement #1 is titled:

1. CONTRACT PRICE:

and your agreement #4 is titled:

4. CONTRACT PRICE AND TERMS:

This reads awkwardly to me. They should be combined IMHO or at least sequential.

[gromicko (Nick Gromicko, CMI)]

Any provisions of Client’s purchase order or other document, which is inconsistent with the foregoing, shall be of no force and effect.

This is simply not true, even if you say it’s the case in your contract. If you author documents that conflict (agreement and purchase order, for example) the consumer may rely on whichever he/she prefers.

[gromicko (Nick Gromicko, CMI)]

Accounts past due shall be charged a late fee at a rate of 1.5% per month (or 1.0% per month if a “consumer transaction” as defined under applicable law), or the maximum amount permitted by law, from the date of invoice. To the extent permitted by applicable law, Client shall be liable to Inspector for all costs of collection, including but not limited to actual reasonable attorney fees, incurred by Inspector in connection with actions or efforts to collect any balance owed by Client.

This is rarely going to happen and even if it does, the 1% only adds up to pennies. I would remove it, if for no other reason, to keep the agreement short, clean, and with less legalese.

[gromicko (Nick Gromicko, CMI)]

Client Signature:________________________________________ __________________________________ Date: ________________________

It is odd that you have your signature line near the top of the agreement. Move it to the bottom. If I were your client I could argue that my signature only represents that I read everything up until it and not anything after it.

[gromicko (Nick Gromicko, CMI)]

Client authorizes release of reports to seller/buyer/realtor: Yes _________ No_________ (circle all that apply and initial in space)

You use the word “realtor.”

1. It is spelled “REALTOR.”
2. Only about 1/2 of all real estate agents are REALTORs (members of the National Association of REALTORs).
3. You don’t specify which agent(s). The buyer’s agent or the seller’s agent or both.

[gromicko (Nick Gromicko, CMI)]

Regarding your SOP your agreement states:

The client also acknowledges receipt of a copy of the Wisconsin Department of Safety and Professional Services Chapter SPS 134 Standards of Practice.

6. STANDARDS OF PRACTICE: The Parties agree that the customary normal industry standards of practice (the “Standards”) shall define the standard of duty and the conditions, limitation and exclusions of the inspection and are incorporated by reference herein. If the State where the inspection is performed imposed more stringent standards or administrative rule, then those standards shall define the standard of duty and the conditions, limitations and exclusions of the inspection.

Your first reference merely says that you’ve provided the Wisconsin Standards, not that the parties are agreeing you’ll use them.

Your second reference to the standards can be any of a number of them.

Pick one.

Furthermore, you define the “Standards” in your second reference to them. You should define it in your first reference.

[gromicko (Nick Gromicko, CMI)]

The Parties agree and understand the Inspector is not an insurer or guarantor against defects in the structure, items, components or systems inspected.

But you are an insurer of the defects in the structure, items, components, and systems that you didn’t inspect?

Drop the “inspected” word from the end of that sentence.

[gromicko (Nick Gromicko, CMI)]

LIMITATION OF LIABILITY: Pursuant to Wis. Stat. § 440.976, no home Inspector may include, as a term or condition in an agreement to conduct a home inspection, any provision that disclaims the liability, or limits the amount of damages for liability, of the Inspector for his or her failure to comply with the standards of practice prescribed under this statute subchapter or in rules promulgated under this statute subchapter.

Why are you including this in your agreement? If you can’t limit your liability by law… don’t. What is the purpose of explaining to your client that you can’t? Worse, you titled your explanation that you can’t limit your liability: “LIMITATION OF LIABILITY.” Get rid of all of it.

[gromicko (Nick Gromicko, CMI)]

In your #3 you state:

This Agreement may not be modified except by written agreement signed by a duly authorized representative of Inspector.

Then you say it again in #9:

9. ENTIRE AGREEMENT: This Agreement is the entire agreement between the Parties with respect to the transaction contemplated herein and supersedes all previous written or oral negotiations, commitments and writings. No promises, agreements, representations or warranties with respect to said transaction have been made by any of the parties except as set forth herein.

You are repeating yourself.

[gromicko (Nick Gromicko, CMI)]

10. BINDING EFFECT: This Agreement shall bind and benefit the parties and their respective personal and legal representatives, heirs, successors and permitted assigns.

That isn’t true and saying so doesn’t make it true, so I would delete this useless legalese.

[gromicko (Nick Gromicko, CMI)]

11. AUTHORITY: Each Party warrants to the other Party that is has the authority to enter into this Agreement and that all necessary corporate or other approvals have been or will be obtained.

If you really insist on having this in there, presumably for when the agent signs on behalf of the client, then remove the word “corporate” and just use “approvals” which would then cover corporate approvals.

[gromicko (Nick Gromicko, CMI)]

12. WAIVER: The failure of either Party to insist on strict performance of this Agreement by the other, according to the terms and understanding herein set forth, shall not be construed as a waiver of the right to insist on such performance and no waiver by either party of any breach by the other of any provisions hereof shall be deemed a waiver of any other prior or subsequent breach.

Why would you put this in your agreement? This clause benefits your client way more than you. Your client only has one performance duty… to pay you.

[gromicko (Nick Gromicko, CMI)]

No other person or entity may rely on the report issued pursuant to this Agreement.

Your inspection agreement (any agreement between two parties) doesn’t bind other people. Saying so doesn’t make it true. Other people may rely on your report (doesn’t mean you have a duty to them) and an agreement between you and your client doesn’t change that. I see no purpose in stating this, even though we have something similar in InterNACHI’s agreement (because members like it in there).

[gromicko (Nick Gromicko, CMI)]

In the event that any person, not a party to this Agreement, makes any claim against Inspector, its employees or agents, arising out of the services performed by Inspector under this Agreement, the Client agrees to indemnify, defend and hold harmless Inspector from any and all damages, expenses, costs and attorney fees arising from such a claim.

That is absurd. I recommend that no consumer sign your agreement.

[gromicko (Nick Gromicko, CMI)]

In the event of a claim by the Client that that there was some deficiency or flaw in the inspection, or an installed system or component of the premises which was inspected was not in the condition reported by the Inspector, the Client agrees to notify the Inspector prior to repairing or replacing such system or component, and to allow the Inspector to observe the problem firsthand, as it was discovered, without alteration or repair.

This statement is in direct conflict with InterNACHI’s assertion that a home inspection doesn’t and can’t reveal every defect. You’ve essentially defined your home inspection service in a way that makes it impossible for you to ever fulfill your duty.

[gromicko (Nick Gromicko, CMI)]

Pursuant to Wis. Stat. § 440.977, notwithstanding s. 893.54, an action to recover damages for any act or omission of an Inspector relating to a home Inspection that he or she conducts shall be commenced within two (2) years after the date of the original Inspection or be barred. The period of limitation may not be reduced by Agreement.

Why did you find it necessary to explain to your client that the 2-year limitation can’t be changed by a home inspector’s agreement? Not necessary since you aren’t changing it. Delete second (last) line.

[gromicko (Nick Gromicko, CMI)]

An Inspector is not liable to a person for damages that arise from an act or omission relating to an Inspection he or she conducts if the person is not a party to the transaction for which the Inspection is conducted.

And this has what to do with your client? A: Nothing. Remove it. You don’t have to tell them that someone else can’t sue you by state law and your client can’t agree (on behalf of that someone) that someone won’t sue you anyway.