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Case against fire sprinkler company dismissed  / Comment on binding quote instead of contract
June 12, 2019
Case against fire sprinkler company dismissed
            National Fire Ins Co of Hartford insured a church that had a loss of $1.5 million in a nursing facility it owned when a pipe burst in the sprinkler system.  National sued under its subrogation rights and came smack up against a written contract that had a waiver of subrogation and limitation of liability clause.  Despite the poor wording and placement of the provisions, the New Jersey court granted the motion to dismiss the action based on Ohio law, which the court noted was not dissimilar to NJ law on these points.  Arguments that the contract was unconscionable were rejected [this was a commercial contract].  
            “The judge rejected National Fire's contentions that the contract was unconscionable, reasoning that: (1) Cintas did not have a duty to explain the waiver-of-subrogation clause to RCMA; (2) there was no factual evidence in the record indicating that RCMA was unable to understand the terms of the contract; (3) Ohio law permits contractual terms to be on the back of a document; and (4) there was no factual evidence in the record indicating that RCMA attempted to negotiate different or additional terms. In sum, the judge found that RCMA waived its right to subrogate its claim by the express language of the contract, and that such a waiver was enforceable under Ohio law.”  National Fire Ins Co of Hartford v Cintas Fire Protection.  Superior Ct of NJ, AD. May 21, 2019
            The court noted that the provisions were in small print on the reverse side of the contract.  Avoid small print.  Not only do you have to have a properly worded contract, but the layout should easy to read.
            2019 is half way over.  Have you updated your contracts yet?  Are you waiting to see your name in print after the “v” in the caption?
Comment on binding quote instead of contract from May 24, 2019 article
            You can lead a horse to water, but you can’t make it drink. 
            Ken, maybe if I say it as a claims manager it will set in, revenue is revenue and you can not accept any revenue without a contract in place. It makes no difference if its repair work, replacement work, over-the-counter parts, installs, inspections, leases, out right sales, monitoring or consultation services. EVERYTHING.
Maybe we should not use the term "contracts" any more. Maybe it should be  transaction documents.
            I am boiling it down to financial transaction documents. Everyone signs disclaimers when they buy a sports or entertainment ticket, brings their car into the dealership to be repaired, when you buy a lottery ticket or scratch-off, every time you use your credit card, every time you turn on your computer, activate your phone, buy an airline or train ticket, check into a hotel or vacation location, your bank account has transaction rules, your ATM card, almost all websites that you visit.
            So let’s not call them contracts, let’s call them financial transaction terms and conditions documents. If everyone started doing this, Ring and Simply Safe would have nothing to talk about. 
Bart A. Didden, Executive Claims Manager 
Security America Reassurance Group, Inc. - SARG 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301