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Lost inspection over contract


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A discerning client refused to sign my inspection contract yesterday because she felt a clause within it required her to pay for my defense in the event of litigation even if judgement was rendered in her favor. This is the contract version that has been offered by our State Board for at least 9 years and no client has ever complained about it until now.

ATTORNEYS' FEES: In the event that Client files suit in any civil court alleging claims arising out of this agreement or the services performed hereunder, Client agrees to pay to Inspector, all costs, expenses, and attorneys' fees incurred by Inspector, his agents, employees, or insurers in the defense of such suit. This section shall not apply to arbitration proceedings unless the selected arbitrator finds that the claim brought by Client is without merit and the Client has been given written notice of the claim's lack of merit prior to the proceedings.

I blindly accepted this language 9 years ago because it was designed by an attorney that serves the Board and I'm not an attorney myself.

I'm thinking of simply removing that clause. It does seems to require just what the client said.

Opinions?

Marc

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Hey Marc,

I read it and agree with your client. Seems an obvious oversight.

It is common practice, in most jurisdictions, that the "loser" pays costs if they fail to prove their claim.

I would be calling your regulator asap and also your atty.

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Too bad you lost that inspection. Did you consider crossing that clause out and going ahead with a modified contract?

It is typical lawyer double-speak. If the claim is without merit the client must pay. If the claim is without merit, there must be written notice of that from a selected arsebiter. If he will declare that the claim is without merit, it is pretty much a given that the client will lose the case anyway or it will be thrown out of court.

So your potential client did not understand the wording. If the claim has enough merit for her to win, that clause does not apply.

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I don't have to stay with it. It's only offered by the Board. I've removed that clause for the time being.

Most inspectors in LA choose to have contracts of their own design.

I'm just nervous about being at the helm, doing what a contract attorney should be doing instead. The responses are re-assuring.

There was another clause that this prospect complained about that I got from Mr.O months ago. I changed the wording somewhat on that.

Marc

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My contracts have a clause specifying that a radon test is not included.

When I get a home inspection who wants a Radon Test as well I just draw a line through each line of that clause, in the presence of the client, and have them initial the change.

The point of this exercise is simply to confirm (by initialing) the removal of the radon clause. All parties are in agreement.

Rather than lose the inspection I would just have penciled out the offending clause in their presence and have them initial it.

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Marc,

Right from the beginning, I got in the habit of emailing a copy of the contract for review along with a sample report at the time I booked a job. Part of the reason was to gather information on the client and close the deal during the phone call.

The other reason was to avoid a situation like yours or worse. If they have it ahead of time there's not much of an excuse for not reading it and deciding if they have any objections to any part of it.

Before I start an inspection, the first thing I do is ask if they reviewed and understood the contract. Then, we sign it.

So far, I've had one snotty college kid from NYC who never bothered to look at it, try to get me to change it. He got the surprise of his life when I told him I wouldn't want anyone to be uncomfortable with my contract but, I wasn't changing it. I thanked him for considering me for the work, apologized for the inconvenience, escorted him to the front porch, and locked the door behind me.

Later, I found out from the realtor this kid and his dad made a living suing people. Seriously.

Make your changes, have an attorney look at it, tweak it for you, and move on.

This might be a blessing in disguise.

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Quote: ATTORNEYS' FEES: In the event that Client files suit in any civil court alleging claims arising out of this agreement or the services performed hereunder, Client agrees to pay to Inspector, all costs, expenses, and attorneys' fees incurred by Inspector, his agents, employees, or insurers in the defense of such suit. This section shall not apply to arbitration proceedings unless the selected arbitrator finds that the claim brought by Client is without merit and the Client has been given written notice of the claim's lack of merit prior to the proceedings.
Marc,
The primary intent of that clause is to induce any legal action into arbitration, rather than a civil trial.
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Right Jim, but what the client said to me made sense and I'm not so quick to dispel with common sense. Les pretty much put me at ease to make the change and to contact the State Board at what seems to be a mistake.

Bill, the contract is first brought to the client unsigned. At that point, if it induces anything in a discerning client, it's the urge to avoid signing it, wouldn't you think (since I know you don't do that Bain thing)?

Marc

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Marc, you could change the wording there, because it does look funky, but in reality it isn't going to compel the client to pay for your defense if they prevail, because that's entirely counter to established precedent. You can't change public policy just by the way your contract is worded. I don't think your discerning not-to-be-client is a lawyer.

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I've got a lengthy contract, and have only had the request to change something once; it was by an attorney. What he said made sense, and I made the decision on the spot to change/ initial his request. Made him happy, and I got the job. I think you just have to consider the changes on a case by case basis (unless you have E&O and are worried about coverage since you modified the contract they have on file)-- kinda comes down to reading people and sticking with your gut....

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In my opinion, and in the opinion of every lawyer who I've ever spoken to on the subject, it's an excellent idea to allow the customer to negotiate the terms of the contract. It makes the contract much stronger.

If a customer has a problem with a clause in my contract, I'll happily work with him or her to alter it to everyone's satisfaction. Of course, there are some terms that I won't change and there are some terms that I'll change only with a corresponding change in fee.

BTW, I think that the clause in Marc's original post sucks. I wouldn't sign it and I'd be impressed that the customer had the sense to read it carefully and the backbone to object to it.

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