Nature of the Case
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Facts
Ps made a serious mistake and entered into an 'Alarm Protection Agreement' with D for the installation and maintenance of a 'central station connected hold-up' system. Ps agreed to pay a $287.00 installation fee, and $49.50 per month for a 3-year service contract. In November 1980, they entered into a second contract calling for monthly payments of $65.85 for continued maintenance of the system. The contracts limited D's liability in the event of loss or damage due to a breach of contract or negligence in performance by D. P was shot and severely wounded on August 31, 1981, during the course of a hold-up of his liquor store. P alleged that he had activated two alarm buttons during the robbery but prior to the shooting. Ps sued D in negligence, breach of contract, and breach of warranty, alleging that D delayed 14 minutes in notifying the police department of the alarm, and that but for this delay P would not have been shot. Paragraph 8 of the Agreement stated: (b) Subscriber acknowledges that it is impractical and extremely difficult to fix the actual damages, if any, which may proximately result from a failure to perform any of the obligations herein or a failure of the system to operate because of, among other things: The uncertain amount or value of Subscriber's property or the property of others which may be lost or damaged; the uncertainty of the response time of the police or fire department; the inability to ascertain what portion, if any, of any loss would be proximately caused by Company's failure to perform any of its obligations or failure of its equipment to operate; the nature of the services to be performed by Company; (c) Subscriber understands and agrees that if Company should be found liable for any loss or damage due from a failure to perform any of its obligations or a failure of the equipment to operate, Company's liability shall be limited to a sum equal to the total of six monthly payments or Two Hundred Fifty Dollars ($ 250.00) whichever is the lesser, as liquidated damages and not as a penalty and this liability shall be exclusive and shall apply if loss or damage, irrespective of cause of origin, results directly or indirectly to persons or property from performance or nonperformance of any of the obligations herein or from negligence, active or otherwise of Company, its employees or agents. It came out in court that Ps could have paid more money for a high limitation on liability. The court ruled for D and Ps appealed.
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