In a recent case before the U.S. District Court of Appeals, contracts once again took center stage, this time focusing on whether or not contracts can impose a social duty.
The defendant alarm company installed an alarm system. The alarm services contract entered into by the plaintiff contained a limitation of liability provision that capped the damages. After the system was installed, the alarm company’s technician removed a defective smoke detector from the home that was not replaced for more than three years until a fire broke out, which caused damage to the plaintiff’s personal property. The plaintiff made a claim under their homeowner’s insurance policy and was paid for a portion of the loss by their carrier. The plaintiff and their insurer then filed a claim against the alarm company. The lower court granted the defendant alarm company’s motion for summary judgment with respect to the contract claim, but denied the motion for summary judgment with reference to the tort claim.