ENFORCEABILITY OF LIMITED LIABILITY CLAUSES IN HOME

LC 2018-145

2018 STATE BY STATE GUIDE:

ENFORCEABILITY OF LIMITED LIABILITY CLAUSES IN

HOME INSPECTOR PRE-INSPECTION CONTRACTS

STATE

LIMITATION CLAUSES

NOTES

Alabama

YES. Alabama Supreme Court held that limitation of liability

provisions are valid and enforceable even if an entire building

destroyed and plaintiff only entitled to recovery of installation fee.

Saia Food Distributors & Club, Inc. v. SecurityLink from

Ameritech, Inc., 902 So. 2d 46 (Ala. 2004) See also, Fox Alarm

Company, Inc. v. Claude Wadsworth, 913 So.2d 1070 (Ala., 2005);

Three lower courts have upheld limitation of damage provisions for

home inspectors. See, Scott McGlon & Shannon McGlon v. Hal F.

Leary Home Inspections, LLC, et al., CV-2007-1557; Fred and

Tena Harris v. Homeinfo, LLC, CV-2009-900183; & Eric &

Jennifer Bell v. Guardian Pest Services, et al CV-2007-900838.

Alaska

NO. AK § 08.18.085(d) Cannot limit liability as contrary to public

policy.

However: 1year statute of limitations to bring claim against home

inspector, AK § 08.18.085(a).

Arizona

YES. 1800 Octotillo, LLC v. WLB Group Inc., 196 P.3d 222 (Ariz.

2008). [Clause in contract limiting liability to total fees paid is

enforceable and does not violate public policy or state constitution.]

Arkansas

MOST LIKELY. Jordan v. Diamond Equipment & Supply Co.,

207 S.W.3d 525 (Ark., 2005). While limitation of liability clauses

have not been applied to home inspectors, Arkansas Supreme Court

have generally allowed limitation of liability clauses reviewing the

totality of the circumstances surrounding the negotiation and

execution of the contract and considering whether there is a gross

inequality of bargaining power between the parties and whether the

aggrieved party was made aware of and comprehended the

provision.

California

NO. West’s Ann. Cal. Bus. & Prof. Code § 7198; Moreno v.

Sanchez, 131 Cal. Rptr. 2d 684 (Cal. Ct. App. 2003) [clause

shortening the statute of limitations for making claim was

considered unenforceable].

Colorado

PROBABLY YES. Constable v. Northglenn, LLC, 248 P.3d 714

(Colo. 2011) (permitting limitation to the extent it is a clear and

unequivocal expression of intent).

Connecticut

POSSIBLY. Mattegat v. Klopfenstein, 717 A.2d 276, 280 (Conn.

App. Ct. 1998) [limitation clause held unenforceable as a liquidated

damages provision and as a limitation clause]. But note that this

same court also stated that "such provisions are upheld under

appropriate conditions, such as assent of both parties" – such as a

carefully crafted agreement with a space for customer to initial next

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to the limitation of damages clause.

Delaware

YES. J.A. Jones Construction Co. v. City of Dover, 372 A.2d 540

(Del. Sup. Ct. 1977); 6 Del. C. § 2704 [by implication]. D'Aguiar v.

Heisler, 2011 WL 6951847 (Del. Com. Pl. Dec. 15, 2011)

(unpublished) [limitation clause in home inspector contract

analyzed as liquidated damages clause and considered enforceable

because damages were uncertain and the amount agreed upon was

reasonable]. However, note that a contract provision waiving

prospective negligence "must be crystal clear and unequivocal" to

insulate a party from liability for possible future negligence.

Similarly, "if one party is to be held to release a claim for fraud in

the execution of the release itself, the release should include a

specific statement of exculpatory language referencing the fraud."

Riverbend Cmty., LLC v. Green Stone Eng'g., LLC, 55 A.3d 330,

2012 Del. LEXIS 547, 2012 WL 4950759

Florida

POSSIBLY - Orkin Exterminating Co., Inc. v. Petsch, 872 So.2d

259 (Fla. Ct. App., 2004) (note case dealt with an arbitration

provision not a limitation of liablity clause). However, there is also

Witt v. La Gorce Country Club, Inc., 35 So. 3d 1033 (Fla. 3

Dist.

Ct. App. 2010) which rendered it unenforceable. If the home

inspector is a professional engineer, it is far more likely that the

clause will be unenforceable. In Moransais v. Heathman, 744 So.

2d 973 (1999), the Florida Supreme Court held that an engineering

company that performed a home inspection could be sued for

professional malpractice notwithstanding a contract existed

between the homeowner and the engineering company limiting the

firm’s liability to $50,000.

Georgia

PROBABLY - Redding v. Tanner, 231 Ga. App. 250, 251, 498

S.E.2d 156, 157 (1998). Or Monitronics Int'l, Inc. v. Veasley, 323

Ga. App. 126, 746 S.E.2d 793, (2013 Ga. App Ct.) (Limited

liability are “not void as against public policy unless they relieve

liability for acts of gross negligence or willful or wanton conduct.”

They must also “be explicit, prominent, clear and unambiguous.”

Hawaii

PROBABLY. Fujimoto v. Au, 19 P.3d 699 (Hawaii, 1997)

[limitation clauses are strictly construed, but upheld, unless (1)

violates statute, (2) contrary to substantial public interest, or (3)

unconscionable]. Must be freely bargained and not unconscionable.

Idaho

YES – The Idaho appellate courts do not appear to have addressed

the use of exculpatory clauses by home inspectors. However, the

Idaho Supreme Court has held in various cases that “[a] contracting

party may absolve himself from certain duties and liabilities under

the contract, subject to certain limitations.” Jesse v. Lindsley, 233

P.3d 1, 6 (Idaho 2008). See also Lee v. Sun Valley Co., 695 P.2d

361, 363 (Idaho 1984) (“We have previously held that parties to a

transaction may agree by contract to limit liability for negligence or

contractually waive rights and remedies, subject to certain

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exceptions.”). The general rule sustaining exculpatory clauses is

subject to two exceptions: “Agreements exempting a party from

liability for negligence will be upheld unless the party owes to the

other party a public duty created by statute or the other party is at

an obvious disadvantage in bargaining power.” Morrison v. Nw.

Nazarene Univ., 273 P.3d 1253, 1254 (Idaho 2012). See also Jesse,

233 P.3d at 6 (quoting Lee, 695 P.2d at 363) (describing the

exceptions to exculpatory clauses as “(1) one party is at an obvious

disadvantage in bargaining power; or (2) a public duty is involved

(public utility companies, common carriers)”); Wattenbarger v.

A.G. Edwards & Sons, Inc., 246 P.3d 961, 974 (Idaho 2010) (“We

found unconscionability sufficient to invalidate a contractual

limitation of liability….”).

Illinois

YES - LIMITED Chicago Steel Rule & Die Fabricators Co. v.

ADT Security Systems, Inc., 763 N.E.2d 389 (Ill. App. Ct., 2002);

Zerjal v. Daech & Bauer Constr., Inc., 405 Ill. App. 3d 907 (Ill.,

2010) [Illinois Home Inspector License Act does not change the

enforceability of limitation clauses]. To avoid unconscionability

argument, the provision should be ‘clear and explicit.’

See Zerjal,

405 Ill. App. 3d at 913-914. BUT, Zerjal was criticized by the

Virginia Supreme Court, which indicated limitation provisions

cannot be over expansive: The “Unconditional Release and

Limitation of Liability” set forth in parties' home inspection

agreement was invalid and unenforceable because it was contrary to

public policy of the State Finch v. Inspectech, LLC, 229 W. Va.

147, 727 S.E.2d 823 (2012).

Indiana

YES – LIMITED Exculpatory clauses are presumed to be freely

bargained for and are not prohibited by public policy. Crowe v.

Boofter, 790 N.E.2d 608, 611 (Ind. Ct. App. 2003). However, there

are exceptions for contracts which are unconscionable, which affect

public interest, or where the parties have unequal bargaining

power. Id. A standardized contract is not automatically

unenforceable because of unequal bargaining power between the

parties. “There must also be a showing that the contract is

unconscionable, i.e., one which contains unreasonable or unknown

terms and is the product of inequality of bargaining power.”

Rumple v. Bloomington Hosp., 42 N.E.2d 1309, 1313 (Ind. Ct. App.

1981). See also Pinnacle Computer Servs. v. Ameritech Publishing,

642 N.E.2d 1011, 1016 (Ind. Ct. App. 1994).

Iowa

PROBABLY. A pre-inspection limited liability clause has not

been tested in Iowa courts. Baker v. Stewarts, 433 N.W.2d 706

(Iowa 1988). The Iowa Supreme Court, in Baker, stated its

preference to not interfere with the right to contract “by enabling

parties to escape their valid contractual obligation on the ground of

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public policy unless the preservation of the general public welfare

imperatively so demands” (i.e. public interest). The Court pointed

out a number of factors to determine whether a contract was one

affected with a “public interest.” The Court noted that courts in

other states have refused to extend a public policy exemption to

transactions by “tradesmen in the marketplace” (the example in the

Tennessee case cited was auto repairmen). The Baker court upheld

the exculpatory clause in the case of a cosmetology school’s

services. Thus, it is probable that a court would allow a limited

liability clause, but not a given.

Kansas

YES. Santana v. Olguin, 41 Kan. App. 2d 1086, 1089-91, 2098 P.3d

328 (2009) (limitation of liability clause in home inspection

contract is valid and enforceable so long as it is not ambiguous or

unconscionable); Moler v. Melzer, 24 Kan. App. 2d 76, 78-79, 942

P.2d 643 (1997) (enforcing limitation of liability clause in home

inspection contract).

Kentucky

NO. Mullins v. Northern Kentucky Inspections, Inc., 2010 WL

3447630 (Ky. Ct. App. Sept. 3, 2010) (unpublished) [holding

limitation clause void as against public policy]. See also,

Cumberland Valley Contractors, Inc. v. Bell County Coal Corp.,

238 S.W.3d 644 (Ky. 2007 and Speedway Superamerica, LLC v.

Erin, 250 S.W.3d 339 (Ky.App. 2008) (both cases focusing on the

unequal bargaining power of the contracting parties).

Louisiana

MOST LIKELY - LIMITED. Cameron v. Bruce, 981 So. 2d 204

(La. Ct. App. 2008) [Remanded case to trial court for failing to

consider whether home inspector’s failure to report structural

problems constituted gross negligence that would invalidate

limitation of liability clause in home inspection contract pursuant to

LSA-C.C. Art. 2004’s proscription against excluding limits of

liability for “intentional or gross fault”]. Note, Wilson v. Two SD,

LLC, 186 So. 3d 103 (La. Ct. App. 2015) where limitation of

liability was found deficient because it was not in writing in a

signed contract (instead language was at the bottom of page of

design plans in small print) and buyers claim they never saw or

consented to the provision.

Maine

YES – LIMITED. Maine generally upholds liability waivers when

they “expressly spell out with the greatest particularity the intention

of the parties contractually to extinguish negligence liability” Lloyd

v. Sugarloaf Mt. Corp., 2003 ME 117, para 8, 833 A.2d 1, 4 (2003);

See also, Hardy v. St. Clair, 1999 M 142, 739 A.2d 368, 370

(1999). The only case directly dealing with a home inspector

contract is a Superior Court case, Morgan v. Criterium – Mooney

Engineers, et al., Maine Sup. Ct., Cumb. Cty, Docket No.: CV-07-

381 (Dec 16, 2009) where court did not uphold a limitation for

“liability for loss suffered by the client due to any cause” and not

limited to “negligence.” See also, Emery Waterhouse Co. v. Lea,

467 A.2d 986 (Me., 1983)(must expressly use the word

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“negligence”).

Maryland

YES. Md. Code Ann., Bus. Occ. & Prof. § 16-4A-01(c) (West 2008)

(requiring only that "[a]ny limitation of the liability… for any

damages resulting from the report on the home inspection shall be

agreed to in writing by the parties to the home inspection prior to

the performance of the home inspection"); The Maryland Circuit

Court also held that the limitation of liability clauses limiting

recovery to the fee for the inspection was valid because the contract

was not the product of unfair bargaining power. See Baker vs. Roy

Haas Assocs. 97 MD.App. 371 Ct of Appeals 1993)

Massachusetts

NO. M.G.L. Title XVI, Chap. 112, §225 requires that a licensed

home inspector must maintain an errors and omissions policy of at

least $250,000 in the aggregate. In addition, pursuant to M.G.L.

Title XVI, Chap. 112, §225 (6)(v), a home inspector may have his

or her home inspector license denied, refused to renew, limited,

suspended or revoked if the home inspector attempts to limit

liability for negligent or wrongful errors or omissions by use of a

clause within a performance contract that limits the costs of

damages for negligent or wrongful errors or omissions. (Note,

pursuant to (6)(vi), performing an inspection without the requisite

errors and omissions insurance, subjects the home inspector to

same potential sanctions as (6)(v).

Use of

Limitation

Clause opens up

Home Inspector

to potential

discipline of

license

Michigan

YES. Dean v. Haman, No. 259120, 2006 WL 1330325 (Mich. Ct.

App. May 16, 2006) [upholding contract for home inspection which

limited statute of limitations to six months where statute provides

six years]; Michigan Nat’l Bank v. St. Paul Fire & Marine Ins. Co.,

566 N.W.2d 7 (Mich. Ct. App., 1997); Shotak v. Vic Tanny Int’l.,

Inc., 513 N.W.2d 428 (Mich. Ct. App., 1994).

Minnesota

YES - LIMITED. Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920

(Minn. Sup. Ct. 1982) [Exculpatory clauses are enforceable

provided they do not violate public policy and include claims for

willful conduct]. In addition, there cannot be coercive power

imbalances like a “health adviser” directed a person to participate

in a gym program. See, Schlobohm, 326 N.QW.2s at 925 (followed

by State v. Wenthe, 839 N.E.2d 83, 2013 Minn. LEXIS 657 (Minn.

Sup. Ct. 2013). Minnesota courts apply a two-part test to determine

whether an exculpatory clause comports with public policy, (1)

disparity of bargaining power between parties and (2) types of

services whether public or essential service. DeWitt v. London Rd.

Rental Ctr., Inc., 899 N.E.2d 883, 2017 Minn. App. LEXIS 95

(Minn. Ct. App. 2017).

Mississippi

NO. Pitts v. Watkins, 905 So. 2d 553 (Miss. 2005) (en banc)

[limitation clause in home inspection contract is unenforceable as

substantively unconscionable because it deprives home buyers of

adequate remedy]. Note, that in Pitts, the liability was limited to

$200, required client to use arbitration, but allowed inspector to file

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in court to collect unpaid fees. There have been other professions

(termite inspectors) that have allowed various limitations of

liability. Thus, limitations of liability are generally disfavored, but

a well-drafted and negotiated contract containing a limitation clause

may be enforceable.

Missouri

QUESTIONABLE. Purcell Tire & Rubber Company, Inc., 59

S.W.3d 505 (Mo. banc. 2001) In Purcell, the Supreme Court of

Missouri held a limitation provision/agreement enforceable, where

the case involved an inspection agreement between purchaser of an

aircraft and an inspection company hired to prepare a report. The

court, in holding that the agreement was enforceable, noted 2

important things: 1) the sophistication of the parties involved in the

deal (which creates grounds for argument when dealing with

perhaps less sophisticated home buyers, e.g., first time home buyer

as opposed to a real estate company or more sophisticated party);

and 2) economic damages being at issue as opposed to personal

injury or other damages.

Montana

PROBABLY NO. Montana Supreme Court has repeatedly held

that limited liability clauses are enforceable so long as they do not

absolve a party of all liability. Zirkelbach Constr., Inc. v. DOWL,

LLC, 2017 MT 238, para 16, 389 Mont. 8, 12, 402 P.3d 1244, 1247

(holding that a contract limiting damages to a set amount does not

violate public policy); See M.C.A. §28-2-702 (2017)(Cannot

exempt responsibility for fraud, willful injury or violation of the

law); Miller v. Fallon County, 721 P.2d 342 (Mt., 1986). See also

Am. Music Co. v. Higbee, 2004 MT 349, para 23, 324 Mont. 348,

354, 103 P.3d 518, 522 (Will not enforce provisions limiting

liability if the agreement is a contract of adhesion, and the clause

limiting liability is unreasonably favorable to the drafter).

Nebraska

PROBABLY. Ray Tucker & Sons, Inc. v. GTE Directories Sales

Corp., 571 N.W.2d 64 (Neb., 1997) [limitation clause is not

enforced if unconscionable or in contravention of public policy];

Hearst-Argyle Props. v. Entrex Commn. Servs., 778 N.W.2d 465

(Neb., 2010).

**Depends on whether Nebraska courts would consider a limitation

clause in the home inspection context against public policy.

Nevada

PROBABLY. At least one Nevada case supports the conclusion

that a limitation on liability or exculpatory clause will be enforced

generally. In Agric. Aviation Engr. Co. v. Bd. of Clark County

Com'rs, 794 P.2d 710, 712–13 (Nev. 1990), citing from Richard's 5

& 10 v. Brooks Harvey Realty INV, 264 Pa.Super. 384, 399 A.2d

1103 (1979), the court held that even though an exculpatory clause

may be generally valid, additional standards must be met. These

standards are: (1) contracts must be construed strictly; (2) such

contracts must spell out the intention of the party with the greatest

particularity. (3) such contracts must be construed with every

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intendment against the party who seeks immunity from liability…

(4) the burden to establish immunity from liability is upon the party

who asserts such immunity….

New

Hampshire

PROBABLY. PK’s Landscaping, Inc. v. New England Telephone

& Telegraph Co., 519 A.2d 285 (N.H., 1986) [enforcing limitation

clause, but stating that such clauses cannot limit liability for gross

negligence].

New Jersey

NO. Lucier v. Williams, 366 N.J. Super. 485, 841 A.2d 907 (2004)

(declaring limitation of liability provision (To $500) in home

inspection contract to be unconscionable and violative of public

policy). But, arbitration clauses are enforceable. Id.

Use of limitation

clause opens

home inspector

to disciplinary

matters

New Mexico

YES. New Mexico Court of Appeals upheld a limitation of

liability clause because clause did not seek to contract away all

liability but to limit the amount of damages it had to pay for its own

negligence. Note, that the limitation in Fort Knox was for $50,000

(28 times fee received of $1,750. Fort Knox Self Storage Inc. v.

Western Technologies, Inc., 142 P.3d 1 (N.M. Ct. App., 2006). See

federal court Valhal Corp. v. Sullivan Assocs., Inc., 44 F.3d 195,

204 (3d Cir. 1995)(holding that proper measure does not compare

liability cap to final verdict but rather to party’s expected

compensation, and opining that cap of greater of $5,000 or design

professional’s $7,000 fee, while arguably “nominal when compared

to the final verdict.”)

New York

YES - LIMITED. Rector v. Calamus Group, Inc., 17 A.D.3d 960

(N.Y. App. Div., 2005) [enforcing clause limiting liability to the

cost of inspection]; Elena Schietinger, et al. v. Tauscher Cronacher

Professional Engineers, P.C., 40 A.D.3d 954 (N.Y. App. Div.,

2007); Goldstein v. Carnell, 74 A.D.3d 745 (N.Y. App. Div.,

2010); BUT see Smith-Hoy v. AMC Prop. Evaluations, Inc., 52

A.D.3d 809 (2008) [dicta stating home inspector cannot limit

liability for gross negligence]. Note also that the limitation clause

must state the limitation, meaning, if limited to the cost of the

inspection, it must clearly say it. O'csay v. Yolo Equities Corp.,

2009 N.Y. Misc LEXIS 5748.

North

Carolina

YES-The following case stands for the proposition that limitations

of liability can be enforceable if the contract is not unconscionable.

This was a land surveyor contracting with a grading contractor.

Blaylock Grading Co., LLP v. Smith (April 1, 2008 189 N.C.App.

508658 S.E.2d 680).

North Dakota

YES - LIMITED. North Dakota will enforce limited liability

clauses. Scott Kondrad v. Bismarck Park District, 655 N.W.2d 411

(N.D., 2003) Limited liability clauses must be clear, unambiguous

and carefully drafted. Hillerson v. Bismarck Pub. Schools, 2013

ND 193, para 12, 840 N.W.2d 65, 69. See also See N.D.C.A. §9-

08-02 (2017)(Cannot exempt responsibility for fraud, willful injury

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or violation of the law).

Ohio

PROBABLY YES. The 11th Appellate District of the Court of

Appeals of Ohio held that a limitation of liability clause in a home

inspection agreement was not an unconscionable act under the

Consumer Safety Practices Act because it met specific guidelines

including: 1. The limitation portion was set off in a separate

paragraph and 2. Plaintiff admitted she read it before she signed it.

Barto v. Boardman Home Inspection, Inc., 2015-Ohio-5210. See

also, Green v. Full Service Property Inspections, LLC, 2013-Ohio-

4266, where the 9

District held that a limitation of liability clause

in a home inspection contract was not unconscionable.

Oklahoma

PROBABLY – LIMITED. Combs v. West Siloam Speedway

Corp., 2017 OK CIV APP 64, 406 P.3d 1064 [factual determination

of three factors necessary to prevail]; Schmidt v. U.S., 1996 OK 29,

912 P.2d 871 [generally enforceable, but “distasteful to the law.”

“clause will never avail to relieve a party from liability for

intentional, willful or fraudulent acts or gross, wanton negligence.];

Manning v. Brannon, 1998 OK CIV APP 17, 956 P.2d 156

[disclaimer not allowed, but bargained for contractual provision

may operate] but see Burd v. KL Shangri-La Owners, L.P., 2002

OK CIV APP 31, 67 P.3d 927 [general, nonspecific waiver is

unenforceable.]

Oregon

PROBABLE. Estey v. MacKenzie Engineering, Inc. 927 P.2d 86

(Or. 1998) [Agreements to limit liability are “not favorites of the

court, but neither are they automatically voided.” To contract away

liability before harm, the intent to do so must be “clearly and

unequivocally expressed.” When the contract language is

ambiguous, it “will be construed against the party who drafted it”

and held unenforceable.]; Anderson v. Ashland Rental, Inc., 858

P.2d 470 (Or. Ct. App. 1993) [Agreement to limit liability must be

bargained for, called to the other party’s attention, or conspicuous.];

Hoskins v. Inspector LLC, 961 P.2d 261 (Or. Ct. App. 1998)

[example of court bending over backward to find ambiguity in

home inspection contract in order to render limitation of liability

provision unenforceable].

Pennsylvania

YES - LIMITED. 68 Pa.C.S. § 7507(a)(1) [a limitation on the

liability of a home inspector for gross negligence or willful

misconduct is void; however otherwise, a limitation of liability for

simple negligence is allowed].

Rhode Island

PROBABLY NOT. Rhode Island Hosp. Trust Nat’l Bank v.

Dudley Serv. Corp., 605 A.2d 1325 (R.I. 1992); Crowther v.

Mariner Square Condo. Ass’n, 667 A.2d 789 (R.I. 1995). BUT see

R.I. Gen Laws §5-65.1-11(12) [home inspector’s license may be

suspended or revoked for including a limitation clause in

agreement].

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South

Carolina

YES. Gladden v Boykn – 2013 S.C. LEXIS 52 (Sup. Ct. South

Carolina March 27, 2013)(Supreme Court upheld contractual

limitation on home inspector’s liability as long as not so oppressive

that no reasonable person would make it and no fair and honest

person would accept it.)

South Dakota

PROBABLY YES. Section 53-9-5 of South Dakota Legislative

Code voids clauses in certain types of contracts “except the parties

may agree therein upon an amount presumed to be the damage for

breach in cases when it would be impractical or extremely difficult

to fix actual damages” SDCL Sec. 53-9-5. South Dakota laws

expressly permit limitations on damages. See, e.g., SDCL 57-A-2-

719(3). See also, Lee v. Beauchere, 337 N.W. 2d 827, 828(S.D.

1983).

Tennessee

NO. Carey v. Merritt, 148 S.W.3d 912 (Tenn. Ct. App., 2004);

Russell v. Bray, 116 S.W.3d 1 (Tenn. Ct. App., 2003). Home

inspections have been deemed a “service of great importance to the

public and thus an exculpation clause in a home inspector’s

contract was void as contrary to public policy” Carey, 148 S.W.3d

at 917-18.

Texas

PROBABLY YES. Dionicia Mireles v. Tejas Appraisal and

Inspection Co., 2007 WL 1826074 (Tex. Ct. App., 2007); Head v.

U.S. Inspect DFW f/k/a Affordable Inspections, Inc., 159 S.W.3d

731 (Tex. Ct. App., 2005). NOTE: Texas attorneys have reported

that results can vary by county.

Utah

YES. Utah courts have held that a release of claims, similar to a

limitation on liability or exculpatory provision, is enforceable and

valid, subject to certain exceptions. In Penunuri v. Sundance

Partners, Ltd., 301 P.3d 984, 991 (Utah 2013) the court noted that

“preinjury releases of claims for ordinary negligence can be valid

and enforceable….but can be invalidated if they offend public

policy…or are for activities that fit within the public interest

exception… and (3) releases that are unclear or ambiguous.” Public

interest grounds to invalidate an exculpatory clause were set forth

in Broderick v. Apt. Mgt. Consultants, L.L.C., 279 P.3d 391, 394–

95 (Utah 2012), when the party seeking to enforce the clause (1) is

involved in business of a type generally thought suitable for public

regulation; (2) is engaged in performing a service of great

importance to the public; (3) holds himself out as willing to

perform this service for any member of the public who seeks it; (4)

possesses a decisive advantage of bargaining strength against any

member of the public who seeks his services; (5) confronts the

public with a standardized adhesion contract of exculpation, and

makes no provision whereby a purchaser [or lessee] may pay

additional reasonable fees and obtain protection against negligence;

and (6) places the person or property of the purchaser [or lessee] ...

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under the control of the seller [or lessor], subject to the risk of

carelessness by the seller [or lessor,] or his agents. See also

Blaisdell v. Dentrix Dental Sys., Inc., 284 P.3d 616, 622 (Utah

2012) (“The limitation of liabilities clause in the contract between

Dr. Blaisdell and Dentrix is enforceable….”).

Vermont

NO. Dalury v. S-K-I, Ltd., 670 A.2d 795 (Vt., 1995) [exculpatory

clauses are unenforceable when they contravene public policy].

BUT see Provoncha v. Vermont Motorcross Assoc., Inc., 974 A.2d

1261 (Vt., 2009) [no public policy barriers to enforcing a clause

limiting liability of an association offering motor cross events].

Depends on whether “home inspection” is a service for which

public policy places the responsibility of maintenance on the

inspector.

Glassford v. BrickKicker, 2011 VT 118, 35 A.3d 1044 (Vt., 2011)

[stating that “home inspection” is a service for which public policy

requires invalidation of exculpatory clauses].

Virginia

PROBABLY. Ash v. All Star Lawn and Pest Control, Inc. 256 Va.

520 (Va., 1998) [disclaimer does not automatically remove liability,

but where inspector uses clear disclaimers and disclosure of his

failure to inspect specific areas of the structure, the inspector will

be insulated from liability. Ash at 525]; Howie v. Atl. Home

Inspection, Inc., 62 Va. Cir. 164 (Va. Cir. Ct., 2003) [applies Ash

to hold that liability was effectively disclaimed]; Williams v. Neff,

43 Va. Cir. 464, 466 (Va. Cir. Ct. 1997) [limited liability clause

considered liquidated damages clause and enforced].

BUT see Baird v. Dodson Bros. Exterminating Co., Inc., 217 Va.

745 (Va., 1977) [broad, generalized disclaimer does not

automatically insulate from liability]. See also, Kocinec v. Public

Storage, Inc., 489 F. Supp. 2d 555 (Norfolk 2007) where Eastern

District Virginia federal court agreed with Howie reasoning, stating

"contractual provision specifically limiting a party's liability"

embodies "one of the essential purposes of contract law--the

freedom of parties to limit their risks in commercial transactions".

Washington

PROBABLY. Scott v. Pacific West Mountain Resort, 119 Wn.2d

484, 834 P.2d 6 (1992) where “exculpatory [limitation of

liability] clauses are enforceable unless (1) they violate public

policy, or (2) the negligence falls greatly below the standard

established by law for protection of others o

r (3) they are

inconspicuous.” But see also, Mieske v. Bartell Drug Co., 92

Wn.2d 40, 593 P.

2d 1308 (1979) where no one element is

controlling, and the court will look at all of the circumstances

surrounding the transaction.

Washington,

D.C.

PROBABLY – LIMITED. Carleton v. Winter, 901 A.2d 174

(D.C. Ct. App., 2006) [cannot limit liability for gross negligence,

recklessness or intentional conduct. Strongly implies that where

LC 2018-145

there is no gross negligence, liability can be disclaimed]. Moore v.

Waller, 930 A.2d 176 (2006) [General liability disclaimer (not

related to home inspection) upheld. limitation clauses not enforced

if doing so would be against public policy].

West Virginia

NO. Finch v. Inspectech, LLC, 727 S.E.2d 823 (W. Va., 2012)

[limitation clauses in home inspection contracts contravene the

home inspector standard of conduct established by W. Va. C.S.R. §

87-5-1 et seq.].

Wisconsin

NO. Wis. Stat Sec. 440.976 states that “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 home inspector for his or her

failure to comply with the standards of practice prescribed in this

subchapter or in rules promulgated under this subchapter .

See Wis.

Stat Sec. 440.975 describing the standards of practice for home

inspectors.

Wyoming

POSSIBLY. Limitation clauses are enforceable as long as they do

not contravene public policy and no willful or wanton misconduct

is shown. Massengil v. S.M.A.R.T. Sports Medicine Clinic, P.C.,

996 P.2d 1132 (Wyo., 2000)(citing Shutkowski v. Carey, 725 P.2d

1057 (Wyo., 1986)). A four-factor test is used to determine if a

limited liability clause would be enforced. First factor is whether

duty to public exists. Public duty exists if service offered is of a

type typically subject to public regulation. The lack of regulations

for home inspectors indicates that Wyoming would not impose a

duty to the public. However, the second factor concerning the

nature of the services leans towards home inspectors providing an

essential service. Third and fourth factors would be fact specific on

whether contract was fairly entered into or whether the intention of

the parties was expressed in clear and unambiguous language. Not

a settled area of law.

The Hanover Insurance Company wants to thank the following attorneys for their help and contributions

to this Guide: Theresa M. Asoklis (MI), Diane Black (OK), Christopher B. Block (DE, FL, GA, KY, MD,

NJ, NY, OH & PA), James M. Bowie (ME), Angela Beranek Brandt (SD), Amy R. Braun (VI, WA-DC),

James Brawley (CT), Barry Z. Brodsky (CA), David C. Campbell (OR), Juliet A. Cox (KS, NE), David

Daly (LA), Beverly A. DeLaune (LA, MS), Joseph W. Denneler (NJ), Jerry Dixon (NM), Craig Dowis

(TX), Jeffrey P. Downer (WA), Jacob Favaron (LA), Jim Gibson (LA), Heather T. Gilbert (IL, IN, WI),

Richard Glassman (AR, MS, TN), Melody J. Jolly (NC), Charles Jones (MN), Richard B. Korn (MO),

Cory Laird (MT, ND, WY), Peter Landsiedel (MT, ND, WY), Michael Ludwig (AZ), Michael T. Marr

(VI, WA-DC), David McGee (MN), Amber Merseal (MT, ND, WY), Stacey Moffet, Esq. (MD, VI, WA-

DC), Cody J. Moorse (TX), David W. Overstreet (SC), Eris Bryan Paul (AL), John Palmeri (CO), George

S. Pitcher (OR), Douglas P. Rucker, Jr. (VI, WA-DC), Hayes Ryan (IL), James K. Secrest, II (OK), John

A. Snow (ID, NV, UT), Mark A. Solheim (MN), Stephanie R. Stomberg (IL, IN, WI), Doyle Valley (MA,

NH, RI, T), Ben Weston (IA), David Wyant (WV).

LC 2018-145

2018 STATE BY STATE GUIDE:

ENFORCEABILITY OF LIMITED LIABILITY CLAUSES IN

HOME INSPECTOR PRE-INSPECTION CONTRACTS

Disclaimer

The recommendation(s), advice and contents of this material are provided for informational

purposes only and do not purport to address every possible legal obligation, hazard, code

violation, loss potential or exception to good practice. The Hanover Insurance Company and its

affiliates and subsidiaries (“The Hanover”) specifically disclaim any warranty or representation

that acceptance of any recommendations or advice contained herein will make any premises,

property or operation safe or in compliance with any law or regulation. Under no

circumstances should this material or your acceptance of any recommendations or advice

contained herein be construed as establishing the existence or availability of any insurance

coverage with The Hanover. By providing this information to you, The Hanover does not

assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision

to accept or implement any recommendation(s) or advice contained in this material must be

made by you (Note all information contained in this guide as of 3/2018).

LC 2018-145