Standard contract language limiting alarm company’s liability found ambiguous by federal appeals court.
- May 27th, 2014
- Wendy Carlisle
- Comments Off on Standard contract language limiting alarm company’s liability found ambiguous by federal appeals court.
You know that language in your contract–that’s in EVERY alarm contract– that says “Alarm Co. is not liable, but if any liability is imposed it will be limited to $[dollar amount] or a percentage of the annual monitoring charge”? Well, the United States Court of Appeals for the Sixth Circuit has found that those two provisions (1. Alarm Co. isn’t liable and 2. if it is liable…) are at odds with each other and make the alarm contract ambiguous. When a contract is ambiguous, it’s up to a jury to interpret what it means. Yikes!
The Sixth Circuit is the appellate court for the federal courts in Michigan, Ohio, Kentucky, and Tennessee. So if your alarm business is in one of those states, you probably need to revise your contract. Everyone else, beware too. Even if you don’t do business in one of those states, the Sixth Circuit’s decision is persuasive (but not controlling) authority.
Read the decision here: Ram Intern Inc v ADT Sec Services Inc