contract signign problem, limitation of liability, alarm contracts

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REVIEWING LIMITATION OF LIABILITY PROVISION
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Ken,
   We do security for utility districts and every district has its own counsel. I have an attorney who has a problem with section 23. Although with all the districts we do (about 75) at least 10 other law firms have accepted the agreement.
   This law firm has a problem with the $500. limitation. How should I respond?
   Are they covered somewhere else in the agreement I can address his concern with?
   23. LIMITATION OF LIABILITY: Customer understands that security systems are available from other companies, and agrees that Company and Customer do not have a disparity of bargaining power. Company would not offer the Detection System at the price provided herein without the limitation of liability of this paragraph. All charges and fees herein are based upon the cost of the Detection System and the services set forth herein, taking into account this limitation of liability, and are unrelated to the values of Customer’s property or the property of others which may be located upon Customer’s premises. Customer agrees that if any loss or damage should result from the failure of the Detection System, or any component therein, or from improper installation, maintenance or repair of the Detection System, whether within the warranty period or otherwise, or failure of a monitoring service, or in the event of the SOLE, JOINT, OR CONCURRENT negligence of Company, Company’s maximum liability, if any, for such damages for associated with the purchased equipment shall be $500.00 and the maximum liability associated with the monitoring services shall be the covered limits contained in Company’s insurance policy. Company agrees to furnish the District with a copy of their applicable insurance policies. Notwithstanding the foregoing, Company’s shall only be liable for its willful, intentional, or negligent actions related to the data recorded on Customer’s equipment, and not any events or incidents beyond the Company’s control. Under no circumstances shall Company be liable to Customer or any other person for incidental or consequential damages of any nature in excess of Company’s maximum liability described above, including without limitation, damages to property, loss of property or revenue, or cost of replacement goods, however, occasioned and whether alleged to result from Company’s breach of war! ranty, SOLE, JOINT, OR CONCURRENT negligence, through strict liability, in tort, under statute or otherwise. (Note: some states do not allow exclusion or limitations of incidental or consequential damages, so that above limit may not apply).
H M
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ANSWEr
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   Looks like this provision started with language in the Standard Form Agreement and then made modifications. The modifications weakened the standard language. The limitation for monitoring error is not $500 but your insurance coverage, something your carrier certainly won't be happy about. There are many other protective provisions and I don't know what changes you made to those, so I can't guess if other provisions in the contract provide protection that the Limitation of Liability may miss. The Standard Form Contracts have the most recent changes needed to provide the most contractual protection available in alarm - security contracts, and the language is easy for subscribers and their counsel to read, understand and accept with little or no modification.
   I do appreciate that your customer base is specialized, municipalities, and they can be difficult, usually demanding that their own forms, drafted by their own counsel for anyone doing work for the municipality, be signed. But that is no excuse for starting with your printed form with this poorly drafted Limitation of Liability provision.
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ANOTHER CONTRACT SIGNING PROBLEM
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Ken,
   We are using your contract, the All in One.
   I have a customer who has stalled on signing the contract, and now the job is done, and they do not want to sign the contract, for various reasons. They had another contract with us very similar to our new form which they did sign, but they most likely did not check the contract out when they signed it before, and this time they did, and their attorney is telling them not to sign this as is. I’ll provide all the info exchanged so you can see what the conversation has been. Yes, I know I should have had this signed first, but we did not want to hold things up. It was an alarm job, camera and access control job for a big warehouse, so lots of roll up doors and fire doors. We used a lot of their existing equipment, contacts, motions, and wiring and replaced the panel, keypads, and some damaged wire and devices.
   I would prefer you do not use our name, but if you have any thoughts that may help the situation, we would love to hear them. Thanks
anon
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RESPONSE
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   I didn't include the various objections the attorney had to the contract as they were mundane and typical. Normally easy to address and accommodate. But, not after the fact. Not after the system has been installed. Open the door before you try and walk through it. Put the shaving cream on before you shave. I could think of lot more examples, but I think you get it.
   So what to do now. You can negotiate the terms, knowing your bargaining position is a but weaker, at least on the installation part. You still have bargaining power on the on going services, in this case Monitoring, Service and Inspection. You could refuse to perform those services unless the contract is signed, and in fact you should decline to provide those services without a contract. It's one thing to risk an installation that you're walking - or running - from once it's installed and you're paid, and another to commit to on going services without contractual protection.

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SPEAKING ENGAGEMENTS
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Reviewing Limitation Of Liability Provision / Another Contract Signing Problem - October 7, 2014