This matter is before the court on defendant's motion for summary dismissal of the complaint and plaintiff's cross-motion for summary judgment dismissing defendant's affirmative defenses. The issue presented by both motions is the effect of an exculpatory provision, in an agreement for a pre-purchase home inspection, as to negligent conduct in the performance of such inspection. It is our conclusion that the clause as contained in the agreement does not absolve the defendant from the results of its own negligence or operate to limit its liability.
Defendant is in the business of providing an inspection service to prospective purchasers of homes. According to a brochure prepared and disseminated by defendant, their experienced inspectors can provide a buyer with the straight facts on the condition of the prospective home so that an unemotional purchase may be made. The pamphlet indicates that all of defendant's inspectors are professionals who are thoroughly familiar with construction methods and materials by virtue of their
educational and professional experience, have completed certain training programs and are informed as to the latest developments in the home construction and maintenance field. Defendant counsels its prospective customers that a decision concerning the purchase of a home is not an easy task and should not be made without the assistance of expert advisors. It includes itself, with the realtor, appraiser, attorney and banker, as being able to provide a home buyer with professional counsel and advice, and in the brochure suggests to the prospective purchaser that when "you have selected the right home for you and your family, you will want to ascertain the true condition of its major elements and features and determine the likelihood of extensive repair or replacement expense after purchase," by means of defendant's inspection service.
Defendant also offers a home service plan for the repair or replacement of specified defects in those components of the home stated to be in sound or satisfactory condition in the inspection report. This additional service is provided under a separate Home Service Agreement for an additional fee.
In April 1978 plaintiffs contracted to purchase a residence in Watchung for a purchase price of $225,000. The contract was made subject to the obtaining of a home inspection report covering general conditions and structural integrity, including the condition of the roof. Accordingly, on May 2, 1978 plaintiffs engaged defendant, and Mrs. Rubin executed an Inspection Order Form as prepared and presented by defendant. This printed form was stated to be an agreement by which defendant undertook, for the specified fee, to perform a standard AMC inspection of the major structural, mechanical and electrical elements of the subject premises, subject to certain terms and conditions. The terms and conditions limited the inspection and report to visible and readily accessible major elements of the home, specifically excluded below-ground plumbing systems and matters relating to code compliance, and included the following provision, being Article 6 of the agreement:
The AMC inspection report is based on the inspector's personal opinion of the condition of the premises at the date of the inspection. Since all elements
undergo a constant state of change and deterioration, no accurate prediction of future condition can be made. However, for a fee and depending on the reported condition, AMC may, at its option, provide the client with a choice of prepaid first year of ownership service agreements to cover a portion of future repair or component replacement expense for owner-occupied, previously-owned houses. Fees and sample plans, if available, will be forwarded with the formal inspection report. Under all circumstances, if such a service plan is not available due to the advanced age or deteriorated condition of the premises or, if available, is not taken by the client, AMC's liability for this inspection is limited to the fee paid to AMC.
When the inspection was ordered Mrs. Rubin was advised by defendant's representative that the report would cover the condition of the property at the time of the inspection and that no prediction of future conditions could, or would, be made. She was also informed that a service agreement was available at an additional cost which would cover a portion of the cost of possible future repairs. However, no indication was made, nor did Mrs. Rubin understand anything in the order form to mean, that defendant would not be responsible for damages resulting from the negligence of the inspector in failing to detect and report any defect in the condition of the premises, or that, in the event of such negligence, defendant's liability would be limited to $175, the fee for the inspection. The report submitted by defendant stated that the house was basically structurally, mechanically and electrically sound, had been satisfactorily maintained and should only require average maintenance. With specific reference to the wood shake roof, the report indicated it to be in satisfactory over-all condition with an expected economic life span of 25-40 years. (The house was then reported to be about 12 years old.)
The inspection report contained the following provision, in small print on the bottom of the first page of the report:
While every reasonable effort was made to ascertain the present condition of the inspected property, AMC does not, under any circumstances, make any representations, guarantee or warranty as to the reported condition of the property's future condition. AMC strongly recommends that home buyers avail themselves of the available protection against unexpected ...