January 28, 2011

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Question

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Dear Ken et al,

    Here is a real case to ponder, and thanks for this venue.

    I'm currently being sued by building and multiple tenants for failure to monitor a fire system in a fire that destroyed an apartment building and where people were injured. We notified the owners and the AHJ two months prior to the fire.  However the notification is being viewed as too vague for the owners to have understood the issue; and therefore they didn't act to make the repairs.

    I've been using your contracts for several years now, however this happens to be an older contract that does have pretty good language etc.

    My lawyer provided to me by my insurance company says he's concerned most about the fact that there are third party claims who are suing and can not be held to the limits of the contract agreement between us and the building. If we are found negligent the third party indemnification clause is not always found enforceable in Pennsylvania under negligence and the clause language should be specific not general covering all things with a blanket statement.

    What are your thoughts on third party suits and the clause for protection in such circumstances?

Thank You

Stuart Rosenberg

PDS fire and security

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Answer

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    The lawyer is correct that non parties to the contract will not be bound, or limited, by the contract provisions, notably the exculpatory clause and limitation of liability provision.  They may however not be third party beneficiaries of the contract; that will depend on factual issues and the current state of case law in PA.  You should ask your assigned attorney to brief that issue for you now, citing cases and law, rather than off the cuff opinion.

    You should also get legal authority on the indemnity issue.  Guessing is not the best way to organize and prepare your defense.  You will want to know if your indemnity provision is going to hold up. 

    I can't comment on a contract I neither wrote nor read.  Your assigned attorney is representing you and you have the right to request legal authority for the opinions expressed, as well as an honest case assessment.

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