Like It Now: Limitation of Liability Clauses
Construction Law Practice Group. His practice primarily focuses on
construction, transportation, premises liability and pesticide litigation.
He also has 10 years of experience in sales and as a business owner.
insurance coverage and professional liability. She also writes about
insurance coverage issues and trends in the South Carolina Insurance
1330 Lady Street, Sixth Floor
Columbia, South Carolina 29201
contract is signed. Goods or services
are sold, and money changes hands.
Everything is good until it is not. That
is when we, as lawyers, get involved.
That is also the point at which people
reread, or worse, read for the first time,
the contracts they signed.
Our society can neither function nor
prosper without the use of contracts.
Accordingly, the freedom of contract
endures as a bedrock legal principal. An
equally important, corresponding legal
principal is that, barring extenuating
circumstances, parties are bound by
the terms of those contracts they freely
enter into. This general principle,
however, is not without exceptions.
This article explores the application of
one of those exceptions, the doctrine of
unconscionability, to limitation of liability
clauses in the context of a contract many
of us will be a party to at least once in our
Unconscionability is the "absence of
meaningful choice on the part of one par-
ty, due to one-sided contract provisions,
together with terms that are so oppressive
that no reasonable person would make
them and no fair and honest person would
accept them." Simpson v. MSA of Myrtle
Beach, Inc., 644 S.E.2d 663, 668 (S.C.
2007). But see Lucier v. Williams, 841
A.2d 907, 911 (N.J. Super. Ct. App. Div.
2004) ("There is no hard and fast defini-
tion of unconscionability."). "The doctrine
[of unconscionability] is not one to be
applied to disturb the agreed allocation of
risk, even if it should result from superior
bargaining power of one party, but rather
to prevent oppression and surprise."
Coker Int'l, Inc. v. Burlington Indus., Inc.,
747 F. Supp. 1168, 1172 (D.S.C. 1990).
In a recent decision, Gladden v.
Boykin, 739 S.E.2d 882 (S.C. 2013), the
South Carolina Supreme Court upheld
Palmetto Home Inspection Services, LLC
("Palmetto") inspection contract. Finding
the provision, which limited Palmetto's
liability to the $475.00 Mrs. Gladden paid
for the home inspection, was not uncon-
scionable, the court stated:
contract on grounds of unconscionabil-
ity, even when the substance of the
terms appear grossly unreasonable,
unless the circumstances surrounding
its formation present such an ex-
treme inequality of bargaining power,
together with factors such as lack of
basic reading ability and the drafter's
evident intent to obscure the term, that
the party against whom enforcement is
sought cannot be said to have con-
sented to the contract.
the home inspector was self-employed,
operating out of his home, while Mrs.
Gladden was trained as a real estate
agent. It was undisputed that Mrs.
Gladden read the contract prior to signing