Contract legislation in NY would affect dealers, monitoring firms

Industry experts say New York senate bill would create liability and insurance concerns


PURPOSE OR GENERAL IDEA OF BILL : Renders unenforceable contract provisions which indemnify or exempt from liability manufacturers, sellers and/or monitors of burglary protection systems.

SUMMARY OF SPECIFIC PROVISIONS : Adds a new

Section 5-326.1 to the General Obligations Law, to render void and unenforceable contract provisions which indemnify or exempt manufacturers, sellers and/or monitors of burglary protection systems from liability for bodily injury and/or property damage caused by their negligence.

JUSTIFICATION : Currently, manufacturers, sellers and/or monitors of residential burglary protection systems include in their contracts disclaimers and/or indemnification clauses which limit their liability, exempt them from liability, or require the purchaser to indemnify them in the case of a judgment against them. By removing accountability such clauses deny the victims of bodily injury and/or property damage from seeking fair damages arising out of negligence. Because these clauses often appear in "form contracts" the purchaser is often either unaware of the clause, or unable to negotiate or modify any changes and modifications to the contract. Therefore, the consumer must accept the contract as written in order to purchase the system. This measure would afford protections to those consumers who become the victim of a crime as the result of negligence of the manufacturer, seller and/or monitor of a burglary protection system.

STATE OF NEW YORK
Senate Bill 2074

2009-2010 Regular Sessions IN SENATE February 11, 2009

Introduced by Sen. KLEIN -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the general obligations law, in relation to declaring agreements indemnifying or exempting manufacturers, sellers, and/or monitors of burglary protection systems from liability for negligence void and unenforceable THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. The general obligations law is amended by adding a new section 5-326.1 to read as follows:

S 5-326.1. AGREEMENTS INDEMNIFYING OR EXEMPTING MANUFACTURERS, SELL ERS, AND/OR MONITORS OF BURGLARY PROTECTION SYSTEMS FROM LIABILITY FOR NEGLIGENCE VOID AND UNENFORCEABLE. 1. EVERY COVENANT, AGREEMENT OR UNDERSTANDING IN OR IN CONNECTION WITH OR COLLATERAL TO ANY CONTRACT ENTERED INTO WITH THE MANUFACTURER, SELLER AND/OR MONITOR OF A BURGLARY PROTECTION SYSTEM RELATIVE TO THE SALE, INSTALLATION, MAINTENANCE AND/OR MONITORING OF A BURGLARY PROTECTION SYSTEM EXEMPTING FROM LIABILITY OR LIMITING THE LIABILITY OF SUCH MANUFACTURER, SELLER AND/OR MONITOR OR PURPORTING TO INDEMNIFY OR HOLD HARMLESS SUCH MANUFACTURER, SELLER AND/OR MONITOR AGAINST LIABILITY FOR DAMAGE ARISING OUT OF BODILY INJURY TO PERSONS OR DAMAGE TO PROPERTY CAUSED BY OR RESULTING FROM THE SOLE NEGLIGENCE OF SUCH MANUFACTURER, SELLER AND/OR MONITOR, HIS AGENTS OR EMPLOYEES, TO AN AMOUNT WHICH IS LESS THAN THE COST ASSOCIATED WITH THE INSTALLATION, SERVICE AND MAINTENANCE PROVIDED BY THE MANUFACTURER, SELLER AND/OR MONITOR IS AGAINST PUBLIC POLICY AND IS VOID AND UNEN FORCEABLE. 2. FOR PURPOSES OF THIS SECTION, A "MONITOR" OF A BURGLARY PROTECTION SYSTEM IS ANY PERSON, FIRM, ORGANIZATION, CORPORATION, PARTNERSHIP, ASSOCIATION OR OTHER ENTITY WHICH, FOR COMPENSATION, RECEIVES SIGNALS FROM A BURGLARY PROTECTION SYSTEM AND TRANSMITS NOTIFICATION TO THE EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02655-01-9

S. 2074 2 POLICE, OR OTHER AUTHORITIES AND/OR SUCH OTHER PERSONS AS ARE SET FORTH IN THE CONTRACT BETWEEN THE MONITOR AND THE CONSUMER.

S 2. This act shall take effect on the thirtieth day after it shall have become a law and the provisions of section 5-326.1 of the general obligations law, as added by section one of this act, shall apply only to contracts entered into on or after such date.