Like It Now: Limitation of Liability Clauses Construction Law Practice Group. His practice primarily focuses on construction, transportation, premises liability and pesticide litigation. He also has 10 years of experience in sales and as a business owner. insurance coverage and professional liability. She also writes about insurance coverage issues and trends in the South Carolina Insurance Law Blog. 1330 Lady Street, Sixth Floor Columbia, South Carolina 29201 803.381.9933 Phone 803.771.4484 Fax jmccue@collinsandlacy.com lwells@collinsandlacy.com www.collinsandlacy.com contract is signed. Goods or services are sold, and money changes hands. Everything is good until it is not. That is when we, as lawyers, get involved. That is also the point at which people reread, or worse, read for the first time, the contracts they signed. Our society can neither function nor prosper without the use of contracts. Accordingly, the freedom of contract endures as a bedrock legal principal. An equally important, corresponding legal principal is that, barring extenuating circumstances, parties are bound by the terms of those contracts they freely enter into. This general principle, however, is not without exceptions. This article explores the application of one of those exceptions, the doctrine of unconscionability, to limitation of liability clauses in the context of a contract many of us will be a party to at least once in our Unconscionability is the "absence of meaningful choice on the part of one par- ty, due to one-sided contract provisions, together with terms that are so oppressive that no reasonable person would make them and no fair and honest person would accept them." Simpson v. MSA of Myrtle Beach, Inc., 644 S.E.2d 663, 668 (S.C. 2007). But see Lucier v. Williams, 841 A.2d 907, 911 (N.J. Super. Ct. App. Div. 2004) ("There is no hard and fast defini- tion of unconscionability."). "The doctrine [of unconscionability] is not one to be applied to disturb the agreed allocation of risk, even if it should result from superior bargaining power of one party, but rather to prevent oppression and surprise." Coker Int'l, Inc. v. Burlington Indus., Inc., 747 F. Supp. 1168, 1172 (D.S.C. 1990). In a recent decision, Gladden v. Boykin, 739 S.E.2d 882 (S.C. 2013), the South Carolina Supreme Court upheld Palmetto Home Inspection Services, LLC ("Palmetto") inspection contract. Finding the provision, which limited Palmetto's liability to the $475.00 Mrs. Gladden paid for the home inspection, was not uncon- scionable, the court stated: contract on grounds of unconscionabil- ity, even when the substance of the terms appear grossly unreasonable, unless the circumstances surrounding its formation present such an ex- treme inequality of bargaining power, together with factors such as lack of basic reading ability and the drafter's evident intent to obscure the term, that the party against whom enforcement is sought cannot be said to have con- sented to the contract. the home inspector was self-employed, operating out of his home, while Mrs. Gladden was trained as a real estate agent. It was undisputed that Mrs. Gladden read the contract prior to signing |