Fire Alarm Monitoring, Inspection and Service Agreements

[fpbu...@aol.com]

I am reviewing a fire alarm monitoring, inspection and service agreement that provides that the contractor performing the work makes no warranties, the building owner indemnifies the contractor against all claims arising from  the contractor's own negligence, and the building owner is supposed to obtain liability insurance naming the the contractor as an insured. Putting aside whether the owner agrees to the indemnification, the agreement also limits the owner's damages for the contractor's negligence or for equipment failure, or strict products liability to de minimis amount. 

 

While I realize that the fees are small compared to the potential exposure, can anyone advise me as to what is typical?   

 

Felicia Buebel
fpbu...@aol.com

[Leo Genn]

Hi Felicia,

        I think the contract language you are looking at in the proposed Fire Alarm Monitoring, Inspection and Service Agreements contract is at or not far from industry standard.  Here is the language on point from a Fire Alarm contract now in effect with one of my clients as the customer:         

"LIMITATIONS OF LIABILITY

It is understood that DavEd is not an insurer and that insurance shall be obtained by customer if any is

desired and that payments made hereunder to DavEd are based solely on the value of the services rendered.

DavEd will repair or replace any equipment covered by this Agreement upon which it is working which is

directly damaged by DavEd on site in the course of performing its service. Such obligation is in lieu of any

and all other obligations and liabilities and all warranties, express or implied, in fact or by law. This

Agreement states DavEd’s entire and exclusive liability and sets forth the entire and exclusive right of the

customer against DavEd arising out of the supply of the service. It is agreed that DavEd will in no event be

liable for any further direct, or any incidental, special, or consequential damage whatsoever."

        DavEd (Tim....@davedfire.com) was selected after a competitive bidding process and the other bidders contracts had similar shields for the Vendor. 

        Regarding indemnification, in my experience with Philadelphia Insurance Companies (https://www.phly.com/ and insurance agent Roger Fuydal of Capacity Coverage Rfu...@capcoverage.com>), naming a third party as an additional insured will not trigger additional cost for General Liability Insurance.  If naming the Fire Alarm vendor an additional insured doesn't trigger a price increase in the General Liability Insurance, there may not be much motivation for the Landlord to balk at naming the Fire Alarm company an additional insured.  

Thanks,

Leo Genn, Esq.

917-583-3007
 

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From: fpbuebel via nyclarealprop <nyclar...@googlegroups.com>
To: nyclar...@googlegroups.com
Sent: Monday, July 20, 2015 4:42 PM
Subject: [nyclarealprop] Fire Alarm Monitoring, Inspection and Service Agreements

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[Marvin Schwartz]

K of adhesion. Unconscionable. Probably unenforceable.  Check case law.

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[Leo Genn]

Hi All,

I think a "contracts of adhesion" claim is unlikely to work in a contract between corporations.

I think "freedom of contract" is a much stronger current in most states case law - -  again, especially in the context of contracts between corporation.   If I were a Judge, I'd cough quite hard before I let a contract party represented by counsel in contract negotiations out of a contract on the claim that the purchaser of services got stuck with a contract of adhesion.

Nonetheless, as Marvin rightly says, one would have to check case law in the state where contract performance occurs. 

All the more so because my comments above don't square with:  https://www.law.cornell.edu/wex/adhesion_contract_contract_of_adhesion

Thanks,

Leo Genn, Esq.

917-583-3007

 

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From: Marvin Schwartz <msch...@schwartzburton.com>
To: nyclar...@googlegroups.com
Sent: Tuesday, July 21, 2015 8:04 AM
Subject: Re: [nyclarealprop] Fire Alarm Monitoring, Inspection and Service Agreements