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Boshyan v. Private I. Home Inspections,  2014 IL App (1st) 131814-U (Ill. App. Ct. 2014)

The Illinois Appellate Court recently held that the trial court properly granted the defendant’s motion to dismiss breach of contract and negligence claims asserted by a home purchaser against a home inspector based on the provisions of the home inspection agreement that explicitly limited the recoverable damages to the cost of the home inspection.

The litigation arose out of a home inspection agreement related to plaintiff’s purchase of a residence. Plaintiffs claimed that the home inspector should have discovered and disclosed certain defects they learned after they purchase the home. The inspection agreement was a two-page form contract drafted by defendant. The pertinent language of the agreement stated:

The client further agrees that the inspector is liable only up to the cost of the inspection…IN THE EVENT THAT THE CLIENT MAKES A CLAIM UNDER THIS CONTRACT ALLEGING ANY DAMAGES DUE TO THE INSPECTORS (sic) ALLEGED NEGLIGENCE, THE CLIENT, HIS OR HER SPOUSE, AND ALL BENEFICIARIES TO THIS CONTRACT AGREE THAT THEIR SOLE DAMAGES TO WHICH THEY MAY BE ENTITLED ARE LIMITED TO THE AMOUNT PAID FOR THE INSPECTION SERVICES.

The home inspector filed a motion to dismiss arguing that the liquidated damages clause explicitly limited its liability to fees for services rendered (the $500 cost of the inspection). The trial court granted defendant’s motions to dismiss and determined that the $500 fixed damages provision was enforceable.

In affirming the ruling granting the motion to dismiss, the Appellate Court’s primary objective was to effectuate the intent of the parties and accordingly it looked to the plain language of the contract. The Court determined that the liquidated damages clause was not ambiguous and was definitely expressed and not susceptible to more than one meaning.

The Court also noted that the Home Inspector License Act (225 ILCS 441/1-1 et seq.) addresses only licensing and regulation of home inspectors, and does not prohibit exculpatory clauses in home inspection agreements. Moreover, the Court held that the relationship between a home inspector and a home purchaser is not a “special societal relationship,” such as that of common carriers-patrons and employer-employees, between which exculpatory clauses are disfavored on the basis of one party’s lack of bargaining power. Rather, “homeowners are in control of their own fate and can obtain a second inspection or bargain for different terms” with the inspector.

Presumably, the appellate court’s emphatic rejection of the purchaser’s claim will discourage future litigants whose home inspection agreements contain such provisions. And presumably home inspectors will be certain to include such provisions every time they are retained.

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