Illinois court upholds HI contract:

[Michael Thomas]

All I can say is: WOW.

From a liability standpoint Illinois has suddenly one of the best, if THE best, state in the union in which to be doing our job:

Decision of the appellate court upheld these provisions of the HI contract:

Limitation-of-liability to cost of inspection
Two-year limitation of liability: (specifically superceeds the statue of limitations)

http://www.state.il.us/court/opinions/AppellateCourt/2010/5thDistrict/December/5100066.pdf

[Raymond Wand]

Thanks Michael, its reassuring to read the courts opinion on exculpatory limitations and where and how the limitation was stated and placed in the contract.

[CHARLIE VAN FLEET]

good thing he had a good inspection agreement to cover his butt--because sounds like his $175 inspection sucked.

cvf

[Bob Elliott]

May or may not effect future cases.
My gut feeling is that all cases in Illinois where the inspector is found liable will not have the inspection fee as a limit in damages.

[Jim Luttrall]

This sounds like a shotgun lawsuit where everyone was named over two years after the inspection. Since we don't have the inspection to look at, only the accusations of the opposing lawyer, I would not jump to conclusions that the inspection was faulty. Maybe it was, maybe it wasn't but we have no facts to support one or the other.
At any rate, the inspector had a good contract and a good judge! The HI still lost though since he paid back the fee and to defend himself.
I would also surmise that the HI must not have gotten a release signed when he gave the refund.

[Tim Spargo]

It's sort of ironic that all we want for Christmas is for our contracts to be recognized as they should!

By the time this stuff gets spun and turned around... even a great inspector can sound like dog meat...

Go to court and listen in someday...it's extortion.

[Jack Feldmann]

Lesson learned.
1. Charge way more than $175.
2. Make sure your contract does not have small type size anywhere, and use all caps on the really important stuff.

$175.....REALLY???????????

[Raymond Wand]

What I find interesting is that this case was appealed from the lower circut court findings against the plaintiffs. Three justices of the appellate concurred with the lower court findings for the respondent.

Keep your contract terms in everyday language. I would go one step further in that your limit of liability and two year limitation be in bold type and be at the top of the contract, not buried further down.

[Michael Thomas]

May or may not effect future cases.

My gut feeling is that all cases in Illinois where the inspector is found liable will not have the inspection fee as a limit in damages.

As things stand now, honoring this limitation of liability in a contract is the law in Illinois (which is a "strong contract" state), upheld at both the trial the appellate level.

To overturn this precedent would be an expensive and clearly uphill fight - someone may still chose to make the attempt, but if they have competent legal counsel they will be told going in that they have little to no chance of success.

OTOH, if you have such a limitation in your contract, your cost of defense just went down significantly - perhaps even far enough to put some steel in the spine of E&O carriers.

IMO, HIs have become conditioned to accept absurd liability compared to what we are paid and what we can actually accomplish under the conditions of many inspections, and it's high time that clients accept that we are offering an informed opinion, not an open-ended guarantee of condition.

If clients don't like this, they retain the right to refuse such conditions, and find an inspector who will accept greater liability.

To date, for me, that would be exactly one client.

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I'd add, BTW, that I do not think this will change the quality of inspections: in my experience you are either motivated by the sort of person you are to do the best job you can, or you are not.

In the former case higher liability is just an additional source of anxiety, in the latter it's unlikely to make you the sort of person who cares about the quality of your work - I know one such inspector who brags that people seriously threaten to sue him several times a year.