Opinion ID: 1779273
Heading Depth: 1
Heading Rank: 5

Heading: The limitation of liability clause

Text: ¶ 42. Because I believe the arbitration provision is enforceable, all disputed matters (including the limitation of liability clause) should be submitted to the arbitrator. However, the same analysis applies. Since the Pittses cannot say they had no meaningful choice, that is, they cannot claim they were forced to do business with Watkins, they should not be allowed to escape the consequences and requirements of their contractual agreement. This is so, in my view, notwithstanding that the provisions of the contract seem unfair to five distinguished Justices on this Court, for each of whom I have immense respect. ¶ 43. The agreement in dispute is titled: INSPECTION AGREEMENT. Although I have learned of no legal requirement for its inclusion, the following notice is posted immediately under the title of the document in large, all capital letter print: THIS AGREEMENT LIMITS OUR LIABILITY-PLEASE READ IT CAREFULLY. ¶ 44. The Limitation of Liability clause provides in pertinent part: Limit of Liability Due to the nature of the services we are providing, it is difficult to foresee or determine ... potential damages in the event of negligence or breach of this Agreement by us. Thus, if we fail to perform the inspection as provided here or are careless or negligent in the performance of the inspection and/or preparing the Report, our liability for any and all claims related thereto is limited to the fee [4] paid for the inspection (unless contrary to state law) and you release us from any and all additional liability. There will be no recovery for consequential damages. ¶ 45. The majority holds that this limit of liability clause is oppressive, substantively unconscionable and unreasonably favorable to Watkins because enforcement of the clause limits Watkins's liability to $265, while the Pittses are left at risk for substantial damages. [5] The majority mixes apples and oranges and misses the salient point. The majority sees the contract as unfair because it compares Watkins's liability with the Pittses' potential damages, rather than comparing Watkins's liability with the Pittses' liability. The majority somehow sees no unfairness in the proposition that Watkins might be held liable for $40,000, when the only damage he could collect from the Pittses is $265. ¶ 46. Watkins apparently appreciated this potential unfairness from his own point of view, because he included in the contractin very specific, express terms a limitation of liability provision which was agreed to by the Pittses. But Watkins did not leave it at that; he undertook to explain it. The majority fails to point out that by its express and very specific terms, the Agreement provided that the inspection was a limited visual examination and did not claim to be technically exhaustive. The majority also fails to note that the agreement specifically points out that Watkins is a generalist and is not a licensed engineer or expert in any specific craft or trade, or that the agreement specifically provided, The fee charged for this inspection is substantially less than that of a technically exhaustive inspection. ¶ 47. In my view, if anything is inherently unfair in this case, it is the majority's conclusion that the Pittses should be allowed to escape the high cost of a technically exhaustive inspection, and pay only $265 for a limited visual examination, and then seek a remedy which assumes Watkins should have performed services far beyond a limited visual examination. It brings to mind the old saw, you get what you pay for. Under a different fact situation, were a lawyer to be hired for $50 to read a deed and comment on the validity of its form, and were the lawyer to say, in a writing agreed by the client, that his or her review is a limited review of the document without researching the public records, I would find nothing unreasonable (certainly nothing oppressive) in the lawyer's limiting his or her liability. ¶ 48. In this case, Watkins argues that the fee he charged was directly proportional to the limited inspection and, thus, it was not unreasonable or unfairand certainly not unconscionablefor liability to be limited. I agree. ¶ 49. As stated supra, the Pittses have not suggested they had no meaningful choice, that is, that absent agreeing to this provision and Watkins's contract, they could not have obtained a home inspection. Consequently, it is my view that this Court should adhere to the teaching in Entergy Miss., Inc., and decline to find the contract unconscionable. ¶ 50. Given that the Pittses were not forced to do business with Watkins, our law heretofore counsels the courts to refrain from inquiring into the adequacy of consideration flowing to the parties. This proposition is supported by much authority. In the past, Mississippi has adhered to the rule that, where parties enter into an agreement, consideration need not be adequate to be sufficient in law. York v. Georgia-Pacific Corp., 585 F.Supp. 1265, 1278 (N.D.Miss.1984). By declaring the Pittses' contract substantively unconscionable (oppressive), the majority has clearly inquired into the adequacy of consideration and has found the consideration flowing to the Pittses to be inadequate, that is, unfair.