services. There was no allegation that Mrs. Gladden was uneducated or unable to protect her own interests. Quite the reverse, Mrs. Gladden negotiated with numerous parties throughout the process of purchasing the home and specifically sought Palmetto's services, passing on a different home inspector described as "harder but best." See Jordan v. Diamond Equip. & Supply Co., 207 S.E.3d 525 (Ark. 2005) (finding an exculpatory clause enforceable in part because the plaintiff had sought the services of the defendant). The clauses are routinely entered into. Moreover, they are commercially reasonable in at least some cases, since they permit the provider or offer service at a lower price, in turn making the service available to people who otherwise would be unable to afford it." 739 S.E.2d 882, 884 (citing Head v. U.S. Inspect DFW, Inc., 159 S.W.3d 731 (Tex. App. 2005) (noting courts uphold limitations of liability in burglar and fire alarm system contracts and finding limitation of liability clause in home inspection contract commercially legitimate for the same reasons)). Accordingly, the court found the clause was not unconscionable. Courts in other jurisdictions have also found similar home inspection contracts, pursuant to which the home inspecting company's liability for any loss or dam- ages arising out of the inspection and report would be limited to the fee paid for its services, were enforceable and not unconscionable. See, e.g., Moler v. Melzer, 942 P.2d 643 (Kan. App. 1997) (Clause in home inspection contract limiting inspector's liability to cost of inspection, was not unconscionable, as clause was not hidden, and record gave no indication of power, nor any indication that purchaser could not have sought a different inspec- tion company.); Head, 159 S.W.3d 731 (Clause in home inspection contract, which limited home inspector's liability to the amount of the fee paid for the in- spection, was not unconscionable, where purchaser was free to choose another inspection service, she was represented by an attorney in the transaction, and without the limitation clause, the inspec- tor was subject to significant risk, which would likely cause the cost for inspection services to increase.). Still, other courts have refused to enforce limitation of liability clauses in home inspection contracts. In those cases, however, it appears that, unlike South Carolina, the states in which those courts sit have well-documented public poli- cies indicating home inspectors' liability should not be so limited. For example, in Lucier v. Williams, 841 A.2d 907, the court rejected a limitation of liability clause in a home inspection contract, relying heavily on a New Jersey statute requiring home inspectors to maintain errors-and-omissions insurance of at least $500,000 a year. The court also refused to enforce a limitation of liability clause in a home inspection contract in Pitts v. Watkins, 905 So.2d 553 (Miss. 2005); however, as in New Jersey, Mississippi requires home inspectors to carry general liability insurance and errors-and-omis- sions insurance of at least $250,000. Correspondingly, the test applied in determining whether an exculpatory clause contravenes public policy is also significant. In South Carolina, courts have generally held that considerations of public policy prohibit a party from limiting liability for its negligence in the performance of a duty of public service, or where a public duty is owed, or public are not on roughly equal bargaining terms. Pride v. S. Bell Tel. & Tel. Co., 138 S.E.2d 155 (S.C. 1964). Courts applying the stan- dards from Tunkl v. Regents of University of California, 383 P.2d 441 (1963), in evaluating exculpatory clauses tend to view such provisions in a harsher light. See, e.g., Carey v. Merritt, 148 S.W.3d 912 (Tenn. App. 2004) (applying Tunkl factors to find exculpatory clause in home inspec- tion contract violated public policy). Therefore, in light of courts' varied treatment of limitation of liability clauses in home inspection contracts, it is helpful to consider the following in determining whether such a clause is enforceable: tions of liability provisions in the home inspection context, the same analysis would likely be used by courts when evaluating such provisions in other professional contracts, e.g., pest control companies and appraisers. In this broader context, one must consider whether the exculpatory clause is reasonable and appropriate given the service it concerns. There should be a correlation between the amount charged for the service and the liability the provider is undertaking when those services are performed. |