Unlock the Power of Online Signature Lawfulness for Property Inspection Report in Australia

How to eSign a document: online signature lawfulness for Property Inspection Report in Australia

all right thanks brendan good morning jeff uh we are going to have a great little meeting this morning i told jeff give us about an hour a little over an hour q and a's but if you have questions if you will just type in the q a chat box and i will try and take a break in between time whenever jeff he'd like to take a break and ask the first question i can certainly respond to you with those questions but jeff has been a friend of ours for several years he helped us get out of a multi-million dollar lawsuit that was frivolous and good god i thank jeff immensely for doing that he was an awful awesome attorney and has always been a great friend to the inspection industry but uh jeff is an attorney here in the houston area and we have referred his name and his company to our members many times so without further ado i'll let jeff introduce himself his background and we'll get this thing started so yeah you're up sure thank you very much um really happy to be here um as you said before everybody got on we've been trying to set this up for a while and i i'm really looking forward to this because uh we're going to get down into the weeds with inspection agreements as far as what i need from from from a legal perspective to protect you guys um how to get you guys out of a lawsuit as quickly as possible um so a little bit of background um graduated from west point back in 1991 and uh spent some time in the army and after that i got out and i was an fbi agent for eight years here in the houston area and got my law degree at night when i was an fbi agent and uh decided to give practice and law a try and got out of the fbi in 2002 i think it was and i've been practicing law here ever since been in the woodlands um got a nice little practice here and uh office up in dallas and um brenda and paul somehow found me several years ago and only remember how it was and asked me to help and i just really enjoyed helping them out and helping out uh inspectors and they they hooked me up with an insurance company that's been feeding me cases of uh home inspector defense for for years and i have a bunch of them now and um it's just part of my practice that i really enjoy um you guys are hard working folks um 99 times out of 100 you don't deserve to be in the lawsuit and um it's it's fun for me to get you guys out as quickly as possible so with uh without further ado let's go ahead and get started um let's share my screen here should be should be up there paul can you see that yes i can see it fine jeff you're okay okay perfect here we go uh so i'm trying to figure out what to call this and i and uh being former military i picked protector six and and those of you who have some military or law enforcement background know what that means how to protect your backside right um you guys are out there on the front lines doing uh doing stuff meeting with clients um in you know sort of emotional situation people selling people buying it's it's a it's a big time in people's life it's a huge investment and sometimes things get crossways and um so the the purpose of my presentation today is to how to help you avoid litigation entirely and if you can't avoid it how to get you out of it as soon as possible so we're going to talk about um the inspection agreement mostly today we've got a couple of other things we're going to talk about at the very end but we're going to go through some important clauses that you have to have in your inspection agreement we're going to talk about limitation of liability probably the most important one attorney's fees the notice clause we're going to teach you how to limit statute limitations and i'll tell you what that means talk a little bit about arbitration and mediation clauses and the reliance clause so after we're done talking about the agreement we're going to talk about whether or not you should incorporate and if you should how and what sort of an entity we're going to talk about a consent to settle provision that's in your insurance probably in your insurance agreement and uh i'll tell you what that means you guys might even know what not even know that it exists but we're going to talk a little bit about that a little bit about report writing i know you guys get a ton of that um in your in your classes and amongst yourselves so i'm not going to harp on it but i'm going to talk about some some things from from a legal perspective and then finally a couple of do's and don'ts some things that i've learned uh over the years working on these cases all right so home inspector lawsuits they they all sort of look the same or similar what might surprise you is that typically it's a good report and and yet the person still finds themselves in litigation and the reason for that is a a gross misunderstanding of the public on what you guys do um you all know what your your scope is but if you ask a client and i do in depositions i ask them what do you what did you think that the inspector's job was when you hired them and this is what they say tell me everything that's wrong with the house and you you know that that's not the case but that's what those people think despite what you tell them and despite what you put in your reports about scope and all that kind of stuff this is what they think after they buy the house they start noticing things right and they become remorseful about about the purchase and they start thinking about how can i get out of this this was not the palace that i thought it was going to be what can i do so they find themselves a lawyer and they decide to sue everybody that had anything to do with the case both of the realtors typically the prior owners almost always sometimes a warranty company who said they were going to fix things and then they don't and then also the inspector whether you get sued justifiably or not it you might find yourself in a long-term battle sometimes years and if you if you even if you do everything's right you're going to be stuck in that situation and it always ends outside of a small handful of cases that i've worked on where we've where the insurance companies paid quite a bit on behalf of the inspector where there was some some some gross error it's a small settlement so you might find yourself in a lawsuit for six months to two years uh and you go to mediation at the end of it and your insurance company pays 2500 bucks or five thousand dollars and you're done and you're thinking why did i have to go through that entire ordeal uh to give these people 2 500 5 000 bucks to to make them go away so how do we how do we stay away from those situations and the the the maybe the only way certainly the best way is to have a good inspection agreement and i'm gonna tell you right now that um i have drafted what i think is the gold standard for inspection agreements at least from a legal perspective i saved it as a word document and when we're done today i'm going to upload that to you guys and you guys can download it or paul and brenda can figure out how to distribute it to you guys and it's in word so you guys can take subtract and add whatever you want but as far as the important clauses that we're talking about today they're the ones that are going to be enforceable if you get sued and so i wouldn't touch i wouldn't mess with those all right so the inspection agreement try to make it separate from your report um i don't really care if it's in a separate pdf file if it's completely two separate documents but at a minimum make sure it's at the front or at the end and it and it just kind of looks different than the report if it's just mashed together with the report um it's it it's easier for the client to say i never i never saw it i didn't pay attention to that he told me what to what to look at in the house and never even knew those things were in there um that's a problem if the inspection agreement is not signed um if that's something easy that they can say never saw especially if it's buried in a 50 page document okay get the inspection agreement signed i know that that oh there's a lot of you guys out there that are thinking i've never had to do that before i've been doing this for 30 years um handshake is is the best policy i'm telling you if you haven't been if you're doing a lot of these if you're doing a lot of inspections this is your this is your main business and you and you've been doing this for a long time if you haven't been sued yet it's just a matter of time um and so what i'm what i'm asking you to do is to get this inspection agreement signed the best what i've seen the best scenario is to is to um give it to them at the beginning of the business relationship when you're making appointments to set up the inspection send it in an email have them sign it have them meet you at the house with a signed agreement if they're paying you a check before you get started also give you the signed agreement um it has to be it doesn't have to be but it's certainly preferable if it's before you give them the report if you're giving them the agreement at the same time that you're giving them your report um i've had clients plaintiffs say i just thought it was a receipt i had no idea so um definitely if it's if it's not signed but if it even if it is try to get it done before you give them that report have it be somebody who has authority if you're in agreement with mr jones have mr jones sign it i currently have a case right now where the inspector had perfect agreement with mr jones and his fiancee mrs or miss smith was at the inspection and she signed it i think it's still going to be enforceable or in litigation i'm i'm not concerned that we're going to have this but it's but it's a problem i'm having to file motions and take depositions and stuff where otherwise i wouldn't because they're claiming that the fiance did not have authority to sign the agreement online signatures are are more than fine in today's world they're they're just as enforceable as something that is signed in person um some of you guys have online systems where everything is online the appointment is set up online it immediately generates a document that goes out to them they can sign it online and you can keep it in you know in your files that's fantastic that makes it very easy for for the inspector very easy for the client and and very easy for me if you don't have that i would ask one of your inspectors um that does to to put that information out i think it's pretty user friendly um even for those of us who aren't real computer literate folks i think it's pretty pretty user friendly if it's not signed it still might be enforceable okay but do not i don't want you to say jeff said i can have it unsigned and i'll be fine i'm not saying that i'm saying get it signed but even if it isn't i might be able to help you out all right talked about this if it's unsigned make sure you give it to the client before the inspection most reports have this clause in there if you rely on this report in any way then you agree to its terms that's a great clause to have if you're not good about getting your contract signed but again you got to give it to them before the before the inspection even takes place and if you think about it it makes sense you know you have an agreement with this with this um potential buyer i agree to do an inspection for you you agree to pay me a certain amount of money right that's your contract that's your agreement as far as the client knows that's the extent of your agreement because he hasn't even seen your written agreement yet so you conclude your your your part of the bargain and all of a sudden you slap this two-page contract on them you can see why that's kind of like it doesn't really it doesn't really make sense right and they're gonna they're gonna probably say that wasn't part of the original agreement and they're probably gonna be right so if you're not gonna get it signed or for some reason you can't make sure that you give it to them beforehand and it has this language in there if the documents are unsigned it's going to be governed by the facts of the case the judge is going to want to know exactly the timeline of when did you first talk when did you first present the inspection agreement when did you do the report and he's going to try to put himself in the mind of that plaintiff and say okay did you really have an opportunity to agree to the terms of this contract okay all right let's get into the weaves with the limitation liability guys some of this is going to be a little bit dry but i promise you this is super important i'm going to go through these and then at the end of this portion i've got some sample contracts and we're going to look at the clauses these are real contracts of real clients that i've had inspectors that are out there that have gotten sued and i'm going to tell you whether or not these these things are enforceable are you you should after we're done here you should be able to tell me whether or not they're enforceable all right limitation liability like i said the most important clause you can have in your contract if you don't have anything else in your contract make sure that you have this what is it in a in a contract in an agreement two parties can limit the amount of the damages if if either party sues so if you're charging 450 bucks for an inspection you can get the other side to agree if we go to a lawsuit about this even if you win plaintiff even if you win client you're only going to get 450 bucks that is absolutely enforceable for you as an inspector and it is an absolute checkmate in the lawsuit if it's if it's well written and enforceable i can't tell you the amount of times that i've had where i've had fantastic agreements and i get the lawsuit paperwork and before i even file an answer i'll call up the plaintiff lawyer and i'm gonna say look i don't think you know about this your clients are probably not showing it to you but here it is i'm gonna send you an email take a look at it and let's talk and and we end up settling for 450 bucks that day okay it's it's that good when it's when it's that well written even the most egregious plaintiff lawyer is gonna is not gonna try and fight it all right in order to be enforceable it has to be conspicuous it has to appear on the face of the document in some way to attract the attention of a reasonable person who looks at it okay everybody knows when they look at their att contract or their you know their their cable tv contract whatever you got this 10 page you know type 8 font everything's small print right if there's a limitation of liability clause in it it can't be that it has to stick out somehow the law has the law in texas the courts in texas have said that it's conspicuous when it is so written that re so written that a reasonable person against whom it is to operate should have noticed it that's that's really the language that they use just should have noticed it it's conspicuous if it's in larger or other some some type of contrasting type or color okay so let's talk about that put it in bold underline it all caps works put it in color works set it apart somehow change the font change the size put a box around it i'm going to show you one of those or some combination of all the above and that's my preference okay if it is bold underline all caps and colors set apart and different font and different size of the box around it no judge in the world will say that it is not conspicuous okay if it's not conspicuous if the judge says nope doesn't stick out it is completely unenforceable even if it is signed and and no matter how well written it is okay that's this i can't emphasize this enough this is probably the most important part of the of the instruction today we're going to look at those clauses in a bit all right attorney's fees if you are sued if a client sues you you're typically not permitted to recover your attorney's fees even if you win okay that's a lot of people don't know that if you're being sued by a client and you win the best you get is out of the lawsuit right does that make sense okay however in your contract in your agreement you can add a clause that allows for you to recover your attorney fees if you win okay this is extremely important because normally the plaintiffs have nothing to lose by suing you right the lawyers sitting there talking to them and says hey let's add the sellers right we don't think they disclose what they should have let's add those realtors man they they sure like acted like they were in cahoots just to get this sale done well that warranty company what about the inspector yeah why not throw them in there okay there's no there's no detriment to suing you because even if they lose they don't have to pay your attorney's fees okay if you have an attorney's fees clause in your contract that allows you to recover if you win that's a huge detriment to them okay they will have to make a decision very early on in the lawsuit whether they want to keep you in because as we start taking depositions and as we start you know doing inspections of the house and and motions and all this kind of stuff my fee my expenses skyrocket right and so if they're suing you for a twenty thousand dollar repair and all of a sudden your attorney's fees are more than twenty thousand dollars they're going to be thinking what are we doing here why why are we you know i don't want to pay this guy any money we need him out of the suit immediately okay so it's a huge detriment to either i mean they may either decide not to see you or they'll suit they'll settle with you sooner than later all right notice clauses what's a notice clause a notice clause is something in the contract where you say something like if client notices something is wrong with the house they have 14 days to notify inspector and give the opportunity to the inspector to reinspect period and the next sentence says if they fail to give inspector reasonable notice within 14 days they waive all of their claims okay that's huge imagine what how how nice that would be to have in a lawsuit right and i asked these questions during depositions when did you first notice the water stains on the ceiling i noticed them two weeks after i moved in why then did you not notify your inspector until nine months later when you fought a lawsuit against them well no one told me i had to well it's right here in the contract that you signed right yes it is okay really good stuff because if i can prove that and then sign and all that good stuff they've waived all their claims all right it's so it's it's such a big deal it's actually considered the same as a release like a settlement like it's it's it's like like the limitation of liability clause it's checkmate if you have a good pre-injury waiver clause it's a release now what are the requirements it has to have language in it that expressly also waves the negligence of the inspector so it has to say something like if client doesn't give notice to the inspector within 14 days and give an opportunity to reinspect client waives any and all claims against the inspector including the inspector's own negligence if it doesn't say that then it has not effectively waived negligence and they're going to sue you for negligence keep in mind i have a contract that has all the right clauses for you guys so don't feel like you have to take notes you know for every single one of these things all right it also has to be conspicuous just like the limitation of liability clause a notice a waiver clause has to stick out okay limiting the statute of limitations what is the statute of limitations all right texas courts have given timelines for every claim that can be brought against you and if it's not brought in that amount of time it's gone forever okay if i got in a car accident today i would have two years from today to bring that lawsuit if i file a lawsuit on two years in one day i i lose judge throws it out okay that's called a statute of limitations most of the claims that are brought against inspectors are either negligence or breach of contract okay negligence has a two-year statute of limitations breach of contract has four you can limit that in a contract okay you can agree with the with the client when he signs that to limit that to make it shorter all right you can limit everything to one year except for breach of contract okay so and for breach of contract it has to be two years the statute they have written statute in the in the legislature that says you cannot limit a breach of contract claim to less than two years so the so the this clause has to be kind of a two-part thing client hereby agrees to limit such limitations on all claims uh to one year except for breach contract which is hereby limited to two years okay then you're set so if they sue you one year and a day after your well it's not after inspection okay it's after the cause of action accrues right this is we're getting down to some legal stuff so if they move in on july 1st but they don't notice the the water stains that they think you should have found until august 1st that's when it's the clock starts to run it's august first so two years from august first so but anyway if you if you have a an effective limitation of liability i'm sorry of statute limitations clause you can limit every claim except reach a contract to one year so if they sue you a year and a day after they notice the water stains on the wall then all those two years touch them in clay statute limitations clauses are gone negligence dtpa uh negligent misrepresentation all those sorts of things are gone and the only other clause or claim they have left is breach contract if they sue you two years in a day after they notice the water stains the breach contract claim is also gone right this isn't gonna this likely isn't going to keep you out of litigation because almost all of the lawsuits are brought within two years so so they're probably going to show up and have one claim and that one claim is going to be breach of contract but i'd much rather have to defend just that one claim than all the other ones breach of contracts pretty easy for you because in the contract it lays that first of all they have to agree that there was a written contract and their and your agreement is going to have very clearly written out there what your scope is right your scope is not to find everything that they think is wrong with the house like the plaintiff believes yours your scope is to um follow the trek standards okay so that's important that's a lot of that's a mouthful for status limitations but important all right arbitration um let's first talk about what arbitration is arbitration is an alternative to a lawsuit with a court it's binding it is informal um it's a little bit less expensive than a regular lawsuit with a judge and a jury um it is usually more friendly for a defendant which would be you guys in a lawsuit than it is for a plaintiff plaintiff lawyers don't like arbitration mediation is different than arbitration mediation is an opportunity for the two sides to come together with an independent person who just kind of says hey guys let's just sit down and see if we can't work this out i don't really know much about the case i'm not on either person's side plaintiff why don't you tell me your side of the story mr inspector why don't you tell me your side of the story and then after i hear it we can go back and forth and see if we can get this thing resolved okay mediation is required in in a lawsuit it's required late after you know all of the depositions and discovery have been done you can you can make it so that it's required early on in the in the in the dispute process if you want i'm not a huge fan of early mediation it almost never gets things resolved because the plaintiff has these ridiculously you know exaggerated expectations about how they're going to get the house bought back and we show up thinking we're not going to pay you more than the inspection fee so it usually is not a fruitful effort but i don't mind having it in the agreement because it gives you a tool if you want to use it unlike all of the other causes that we talk about today where you have to be written a certain way and they have to be conspicuous arbitration clauses mediation clauses are binding and they just have to be in agreement somewhere courts will enforce mediation and arbitration agreements if it's in the agreement at all and the reason is because they just want to get the case off their docket and clear up their docket right it's less work for them if they can get rid of your case so if you show up to the judge and say hey judge we got an arbitration clause we'd like to he's there you go you're off i'll sign it you're out of here okay so very easy to enforce um heck you can even you can even participate in a lawsuit for a year take depositions and do stuff like that and then enforce it and go to arbitration judge probably still going to sign it it also is important because depending on where your inspection is there are some very plaintive friendly venues you don't want to be sued in beaumont you don't want to be sued in the valley okay some places down there by corpus very plain and friendly um venues so if you're doing an inspection in beaumont and someone sues you wrongly you think you can decide do i want to enforce this arbitration agreement or not just because it's in there doesn't mean you have to enforce it right plaintiff's not going to force it because they hate it so you can sit there with your lawyer and say you know what i think we're going to enforce this and then we do and then all of a sudden we're not in a beaumont court we're out and we're in some sort of smaller uh um venue with a with a arbitrator that you've agreed with right that you've agreed on and it can go a lot better for you all right let's take a look at some agreements i have pulled some from the from the archives here don't worry about trying to read this i know it's going to be small on your screen and i've got what i want to talk about i will blow up but i want to show you what this agreement looks like i've taken the inspector's name and i've redacted it those are the blue blocks the red lines i have added okay that's not something that was in the original agreement but those are the clauses that i want to talk about okay so here's page one and that's page two and this is page three okay so this is the contract that we're talking about back to page one first thing i want to talk about is this clause here client agrees to notify the inspector in writing of any complaint or item and question within 14 days of discovery and allow the inspector access to the property to evaluate these items blah blah blah blah blah clients failure to permit the inspector to reinspect the item an issue shell mean the client has waived any claim against the inspector for a breach of this agreement at any time beyond one year after the date of the agreement all right what do we got going on here that's a hodgepodge of three different things okay that's a that's a waiver clause right he's trying to get them to to waive the claims if they don't give proper notice okay they're also trying to limit the breach of contract claim with the statute of limitations beyond one year you see that at the bottom okay that's so let's look at the notice the waiver and notice what do we need for waiver to waive all claims it has to expressly mention that you're waiving negligence against the inspector here it says uh has waived any claim right is that effective to waive negligence nope it's got to say negligence right the notice clause also has to be conspicuous it has to stick out okay if you look back underneath that again that red underlining is mine okay there is nothing conspicuous about this waiver slash notice clause that is unenforceable okay there's nothing i can do with that the status limitations part at the end um does not mention breach of contract also unenforceable as to breach contract the dispute resolution portion of this at the bottom i'm not going to spend too much time with this all you need to know about this is if it's in there it's going to be enforced it's really that simple all right page three the inspector sticks this clause here at the bottom okay it's at the end of the page three of a three page contract not conspicuous whatsoever inspectors liability here under shall be limited and fixed in an amount equal to three times the inspection fee paid okay if it was in bold in red different font some combination of those and it was conspicuous and it was sticking out that's enforceable as it's written in this agreement it's useless to me okay and useless more importantly to you all right next agreement this is it this is the whole agreement i've redacted anything that has to do with the name of the client or the name of the inspector it was signed okay this entire agreement consists of one really one clause and i've boxed it out there and it's a limitation of liability his entire agreement is a limitation of liability clause all the language is sufficient so really the question is is a one-page agreement consisting of nothing else but a limitation of liability clause enforceable it doesn't stick out it's not in bold or anything else but on the other hand it's it's the only thing in the agreement right it doesn't have to stick out from anything it is the agreement right so um i'm actually in litigation with this with that clause right now i think it's going to be fine i've i've actually found case law that says you know it's on the front page there's not much to it they should have seen it so i think i'm gonna be fine but again if you have control over drafting your agreement why not put a box around it you know make it bold do something it's too easy not to all right next agreement we have uh this is a two pager okay this page one is page two right again the red boxes are mine the blue boxes are redactions and what i want to talk about first is the limitation of liability let's look at it first is it conspicuous does anything about that jump out at you more than anything else on that page and the answer to that is no okay the language is fine and the only argument i have is gonna be it's on page one and the heading is in bold that's it and the defense lawyer is going to say so what every other heading is in bull two right and the judge is going to have to make a call is that conspicuous or not and that's a big deal that's whether you're in a lawsuit for a month or whether you're in the lawsuit through a jury trial that's the difference in whether or not that's in bold it's a big deal dispute resolution all right this is another one of those hodgepodge clauses the client wait let me pop it out for you the client understands and agrees that any claim for failure to accurately report the visible defects blah blah blah made in writing reported in 10 days the company can respond within five days uh client further agrees um that they'll make no alterations client understands there is any failure to timely notify the company and allow adequate time to investigate and reinspect shall constitute a complete bar and waiver of any and all claims against client that they may have uh related to the alleged act omission or claimed condition all right let's stop right there that is a notice slash waiver clause why it's hidden in a dispute resolution section i do not know um it's part of the you know the process right if there's a complaint they want you to follow this process so i get why it's in there but what do we need for an effective waiver slash notice clause number one it has to be conspicuous it's not number two it has to expressly mention negligence it doesn't okay so this this clause is is useless to you and it's useless to me all right the rest of it is the binding arbitration part of it that's enforceable at the bottom if a lawsuit is filed by the client against the company and the company successfully defends against the claim the client agrees to pay the company reasonable attorneys fees court costs and expenses that's enforceable even though it's stuck in this section right here i'd like to see it separate but that's enforceable so that's a nice little hammer for me to have if you hey mr plaintiff i think your case is not good you better be careful if you don't win you're going to have to pay your own attorney's fees and mine both all right stats limitations clause at the bottom the parties agree that no claim demand or action whether sounding in contract or in torque may be brought to recover damages against the company in bold more than one year after the date of the inspection okay is that enforceable to have them waive the breach of contract claim no is it enforceable for them to waive everything else if they don't file suit within a year probably so okay that's probably going to mean if they bring suit in a year and a half the only claim i'm going to be fighting is a breach contract claim and that's that's pretty good next one this is a three-pager got a lot of stuff going on here i'm going to show you what the contract looks like first and then we're going to talk about it there's page one this is page two the red box is mine the beige box is not mine and this is page three okay lots of causes in this one lots of clauses let's go back to page two first thing i want to talk about is the limitation of liability i don't even have to put a red box around it or anything it's in a completely different uh color and it's a completely different font happy times for me that's enforceable happy times for you you don't have to worry about this lawsuit all right here's the dispute resolution portion of it again they have the notice here tucked inside of it i don't like that my contract my agreement that i'm going to give you as it's separate client understands and agrees blah blah blah 10 days from the date of discovery allow time to reinspect uh no alterations and then in bold the client understands and agrees that any failure to timely notify inspector to reinspect as stated shall constitute a complete waiver of any and all claims against client i mean uh the client may have against inspector related to the activation or claim condition all right what are our two things is it conspicuous okay that's bold i'm i'm thinking that's conspicuous i would much rather have that in its own section but i like that it's in bold second does it expressly mention negligence it doesn't okay it says whether sounding in contract or tort okay the tortoise negligence but it doesn't use the word so that's not going to be enforceable to waive any negligence claims against you all right it'll wave everything else but you're still going to be a lawsuit fighting negligence the rest of the agreement has to do with mediation and arbitration we don't need to touch on those except to say every court in the state is going to enforce those i always thought it was a little bit telling that the courts require all these others even if the person signs it right we used to think if you sign an agreement everything in there can be held against you really not not so but the courts just because they want to keep their dockets smaller they don't require anything for an arbitration agreement it just has to mention arbitrate you can literally say parties agree to arbitrate and put it in three point font and tuck it on page three and they'll enforce it status limitations for this one more than one year after the date of the inspection time is of the essence client understands that this time period is shorter than otherwise provided by law okay again uh it's not going to be effective to reduce the breach of contract claim but it is going to be effective to reduce every other claim to one year which is pretty good all right next one and only a couple more here so this is a two pager yeah actually it's a three pager plus the signature line all right so here's page one here's page two there's page three we're gonna talk about those clauses and then the signatures on page four shifting straight to page three again red boxes are mine does the limitation of liability box stand out is it conspicuous maybe the only thing about that that is conspicuous that isn't all bold right but if you're looking at it in the scope of the entire agreement does it really stick out so much that the reasonable person would see it maybe i don't know depends on the judge um i would certainly like to have it maybe one more thing bold in italics put a box around it make it a little bit bigger something okay dispute resolution again with the notice slash waiver claim within the dispute resolution section i like to have it separate reinspect let's see okay this has all kinds of stuff about 10 days and giving notice but then it just goes in the event the dispute cannot be resolved the parties agree that this dispute shall be resolved by mandatory and binding arbitration all right so there's no waiver clause in here at all it's just you know give 10 no to give 10 days notice there's no penalty for you know what happens if they don't give 10 days notice but the arbitration agreement is obviously enforceable attorney's fees you know it there's no magic language for this attorney's fees you know it anything that says hey look if we are in a dispute you fought claiming against me and you lose you're liable for all my fees and expenses okay the last two agreements are both one pagers and they look sort of similar but i want to talk about these all right this is the agreement it's one page which i like i like shorter rather than longer is there anything without even reading that is there anything about this that sticks out okay what sticks out well important limitations and disclaimers that's in bold you got a couple of things in all caps uh no representation is made concerning any other condition or future performance that's it nothing else is is conspicuous like we've learned today but look at the clauses that he has in here customers notify company in writing of any complaints within seven days of inspection and must thereafter allow prop reinspection otherwise all claims for damages are riding out of such a complaint are waived by the customer is it conspicuous no does it mention negligence expressly no is it enforceable no if customer institutes any action against blah blah blah fails to prevail customers shall be liable to company for all of its attorneys fees incurred is that enforceable yes actual damages for any breach of contract or warranty negligence or otherwise are limited to the amount of inspection fee that's your limitation of liability clause is that conspicuous not even close might as well not have it in there customer by accepting this report or relying upon it in any way expressly agrees to those limitations and disclaimers all right that's the first time we've we or at least i've talked about the reliance clause if this agreement was unsigned and as you can see in this case it was not signed i like to have that language in there okay oftentimes the plaintiff lawyer i do this a lot right i represent lots of inspectors most of the time that i'm in the lawsuit i've done it dozens of times it's the first case that the plaintiff lawyer has ever had suing an inspector they're almost always one-offs um and so i'm sort of educating them on on these clauses just like i'm talking to you guys um but if they really don't know what they're doing as a plaintiff lawyer they're not going to have prepared their client for the deposition so if i'm in a deposition and this clause is in there and you've given this rep this agreement to the client before you did your inspection i'm gonna say you had this before you even did the inspection right right and you paid for this you gave him good money for it right you expected him to do everything that he promised to do right yes all right look at this clause right here you relied on this report when you bought the house right we wouldn't even be here if you didn't rely on it is that true yes that's true well if you rely on it anyway you agree to these limitations and disclaimers right that puts them in a really bad spot okay um sometimes because they're not prepared their lawyer hasn't prepared them they'll just say i guess it does that's good that's good language for me so it just gives me something to needle them about in a deposition gives them gives me some ammunition to work with doesn't mean the judge is going to buy it much rather have a signature but it helps all right last one here another one pager this box contains all of the clauses that i want to talk about none of them are have separate headings none of them are conspicuous they're just all hodgepodged together let's talk about them all right first part client is urged to contact a qualified specialist to make further inspections all right we don't care about that one client must notify inspector in writing of any complaints within seven days of the date of inspection and must thereafter allow proper inspection of the item in question otherwise all claims for damages arising out of such complaint are waves what is that that's our waiver notice clause what are the two things it has to have has to be conspicuous is it conspicuous nope does it expressly mention liability the negligence liability of the inspector no is that waiver clause enforceable no next one if the client institutes any legal action concerning this inspection and fails to prevail on all causes of action alleged clients shall be liable to the inspector for all of its attorneys fees incurred in such action that's your attorney's pre a fees permission is that enforceable yes something interesting about this one and this is me as a lawyer finding this interesting more than you guys i'm sure and fails to prevail on all causes of action alleged what happens if that homeowner sues the inspector for negligence breach of contract dtpa negligence negative misrepresentation fraud a whole bunch of stuff right and let's say i've been the good lawyer that i am i am successful on seven out of eight of those claims but the negligence claim sticks and the jury hits you with that well this clause says if the client starts a lawsuit and fails to prevail on all causes of action alleged clients shall be liable to the inspector for all of his attorney's fees so i'm gonna go to the judge and i'm gonna say look judge jury just said my client owes forty thousand dollars to that plaintiff this clause says if he fails to prevail on all causes of action alleged he failed to prevail on all of them except negligence right so i get my attorney's fees and oh by the way that's 40 grand so we'll just agree to shake hands on the way out of the courtroom and we'll be done okay that's a nice little nice little clause to have in there okay so that that is the agreement portion of the instruction today um we've been going for almost an hour paul you guys want to take a quick break it's i don't have much left if you want to just go straight through the questions yeah we got a couple questions here someone asked uh should the client initial those specific clauses throughout the contract i like that a lot it's not required but it sure is hard so that goes to conspicuous right it's hard for them to argue i didn't see it if they put their initials right next to the paragraph that says limitation of liability so not not not required nothing in a law that says you have to have that but i like it okay another one says what constitutes a breach of contract um so in a general sense a breach of contract means a contract means party a agrees to do something party agree party b means to do something um in exchange for that has to be a two-way thing so in an inspector scenario it would be i agree to perform in inspection pursuant to the trek rules and the client says in exchange for you doing that for me i agree to pay you 450 bucks that's the contract right aside from all the terms that we talked about so an example of a breach of that would be if they can prove that the inspector failed to meet the trek standards in you know in one of those areas let's say it's you know plumbing right if he didn't you know more about what's required under the trick rules than i do but if you fail to meet you know one of the standards under the track guidelines that's a breach of contract that's an example of a breach of contract all right good another one question is how common is a chinese drywall issue and should it be in our agreements i all i can tell you about that is um i have never seen it involved in a lawsuit okay um you guys are doing a lot more inspections than i am lawsuits about inspections but um i have never seen that so i would i think i would defer to you know the guys have been around for a long time and see what they think about that but i i certainly have not seen that in a lawsuit the most common um things that that inspectors get sued about let me just take this off screen sharing while we're talking right quick so the most common things that i see um in lawsuits failure to identify water penetration or water damage mold termites and foundations and all of you are going well i don't have to talk about mold or termites why why is jeff mentioning that just because you don't have to do it in your report and trex says you don't have to report on it does not mean you can't get sued for it okay i can get you out of it but anybody can sue you for anything so um is frustrating but um those are the most common things so other than than than mold and and termites which you guys aren't responsible for the most common things are water penetration and foundation okay good water penetration foundation good okay uh see i have another question here i've been holding for you says how much detail should be in an answer to a summons so um when you get a lawsuit filed against you the first step that you should take is call your insurance company they will contact me or somebody like me to file the answer on your behalf so you shouldn't even have to my my job as i see my job if you come to me is to take this off of your shoulders you don't have to worry about this you got other things in your life you need to worry about you don't need to be worrying about this lawsuit i'm going to be the one that's drafting the answer for you but to answer your question very little what i typically put in the in the answer is you know we deny everything the plan says and i'll put that in lower language so it'll it'll be a page and a half but that's typically what it says is we deny everything they say okay good let's see someone's asking will the inspection agreements you're offering be good for ohio since we do have other uh people from other states on this on this conference call would it be you want to tell us would it still be applicable in other states that is a really really good question um i guess i didn't know that we had out of state folks these are texas laws um but so so at a minimum i would take that and if you if you have an ohio lawyer that that handles you know inspector cases i'd run it by them to see but if you don't have somebody like that the laws don't change drastically from state to state and these clauses that are in this agreement are um i'm not trying to pat myself in the back i'm just i take language from cases and i and i put them in the clauses so they're they're very strictly well written um they're probably going to be sufficient for wherever you are but um so let me put my lawyer hat on and say i wouldn't rely on that if i was you i would get with another ohio lawyer to make sure but if that can't happen for some reason i would use this more than just you know some other contract absolutely that's a good point jeff and for those of you that are not in texas or those that even are in texas both our association internachi and in texas to priya's branch of internachi also have samples of inspection agreements that you can download and use modify them to suit your own self and have your own attorney look them over so yes good good points but jeff is telling us general what his practice has been in texas for us and you know i'm sure it's going to be not a whole lot of dissimilarities in other areas but uh let's see another question here i'm going down these things that i talk he says uh is there a way to download a copy of the agreements or agreements like what you've shown i think you're gonna post those where we can share those right yeah i'm gonna uh before we before we get and i have some more more slides here that i want to get to but when i'm done i'm gonna upload those to the chat section and my understanding is you can just click on it and download it it's gonna be that that simple so i'll let you know when i do that when it's available um but it's going to it should be that simple and then as you said it should be easy to do that with with you guys from your website okay for texas inspectors this course has finally got the approval of trek we just got that this morning run a little late on it but if you are a texas licensed inspector please put your name your full name and your trek license number on the chat box and so we can get you the continued education for this two-hour class uh one more question jeff and it's it's probably not so much direct to you as it is to me but says if we purchase insurance through internachi which internachi offers a you know insurance said are you the attorney that rep is represented that insurance company and i believe internachi has their own corporate attorneys that answer those questions for us well here's here's my pitch um i would like to do more of this um and i was not aware that internachi had their own insurance um but if you guys i mean you can you can recommend me to be on their panel and i'd love to do that i would love to do that this is it's really one of the areas of my practice that i enjoy the most all right certainly here's proof that how much i enjoy doing it all all the stuff that i've given you today for the agreement gets you out of the lawsuit sooner which means i'm not making as much money right it would be in my best interest if you guys were in a lawsuit all the way through trial but i don't want that for you guys i want you guys to get out as quick i'd rather do a hundred cases that last two months than one case that lasts two and a half years so um yeah i'd be you know i'd be honored if you guys would would recommend that i'd love to do that well good let's see i don't think i'm see if i got any other questions here jeff let me let me pop up and finish finish these real quick and um maybe somebody else will come up with some questions in the meantime yeah go ahead we've got uh quite a few good comments about your presentation so yes go ahead okay so all right now we're not talking about the the inspection agreement consent to settle what is what does that mean um your insurance policies likely have a clause in there that gives you the inspector the authority to accept or deny a settlement okay so if we're in a lawsuit and the other side says to me look i want to i want to get your inspector out of here i'm willing to accept two grand and so i go to you as the inspector and i go to the insurance company i say look they want to pay 2 grand you guys want to pay it we'll get you out of this and the insurance company says heck yeah i'll pay 2 000 to get get out of this it's going to cost me a lot more money to have you do all these depositions and then i go to the inspector and the inspector says heck no i'm not paying that knucklehead a penny i don't deserve to be in this lawsuit and i don't want to be in it i'm not paying a thing i don't care what happens look i get it okay um it's an emotional situation it shouldn't be emotional it should be a business decision and just you know believe me you're not going to get the kind of satisfaction that you think you're going to get if you go through the entire lawsuit including a trial and you win all right if that happens you're not gonna walk out of the courtroom and shake my hand and say jeff that was awesome let's do that again soon okay that's not gonna happen no one's gonna say they're sorry for suing you nothing like that so i'm imploring you guys if if i or another lawyer come to you and say look i know you didn't do anything wrong i can get you out of this you can go about your life you don't have to worry about depositions all you got to do is consent just give your consent all right it doesn't mean you're a bad inspector it just means that this whole system is kind of screwed up and it's the easiest way to get you out the the agreements the settlement agreements have language in there that specifically say we're not admitting to we did anything wrong uh this is going to be confidential um we the parties agree not to disparage each other you're not going to make a complaint to track you know we're going to have all that in there to protect you but it is nice to get the lawsuit over okay all right to incorporate or not to incorporate i don't want to get too much in the weeds here but um if you're an individual if you're if you're doing business as you know joe's inspections or if you're an incorporated entity like hey joe's inspections inc the plaintiffs are allowed to recover attorneys fees from you if you are an llc an llp or an lp you can't get hit for attorney's fees okay so that's kind of a big deal for all the reasons that we talked about attorneys fees earlier if you haven't incorporated and you're thinking about it you might you give me a shot if you don't remember this stuff and i'll help i'll walk you through it but you might consider being an llc okay because if you know this really ticks off plaintiffs when they when they sue me and i call them and i say i you probably don't know this but um i see you're trying to get attorneys for my guy you know that he's not you're not eligible to get attorneys from him they get mad right i mean that's that's a big deal that can be a lot of money all right inspector's version of report writing 101 um don't mark everything as as deficient okay i like when they're complaining about the plumbing and there's a big x through the plumbing deficient box i have to admit i like when they're talking about foundation and you've marked the foundation as deficient but if they're complaining about the plumbing and the and the foundation and 17 other things are marked as deficient that's not great okay the jury's going to think he marks everything is deficient he's just trying to cover himself he's not really giving the the client notice you know unless it's just a real wonderful house and you ha and everything is deficient so i mean you gotta you gotta do what you gotta do but if you're just if you find yourself just doing it to to cover yourself um try to refrain from doing that same thing with recommending an expert follow up um if you reckon if they if they're complaining about the plumbing in the lawsuit and it says in your report hey get a plumber before you close on the house that's awesome but if you recommend a plumber and a roofer an electrician and a foundation guy and a grading specialist and everybody else then the same thing jury's not going to put much weight on we talked a little bit about about mold and termites here's my you guys know what your requirements are as inspectors from a legal perspective if you see something we know you're not required to report on the presence of of mold and termites we know that if you see evidence of it either recommend an expert to follow up or don't mention an expert at all okay don't put black substance on the wall and then tell the person in the inspection ah it's just dust okay that's not good because no matter how you're not required to report on the presence of mold if you tell them not to worry about something that later turns up to be mold that's negligent misrepresentation and that will keep you in the lawsuit so either recommend an expert or don't make a comment about an expert at all or or comment about mold now you got to comment on the the damage you know if you see you know damaged wood or you know a tunnel or something evidence of a termite by all means comment on that but don't put that and then say it's old i don't see any evidence of active termites don't worry about it okay and that happens last section here just some do's and don'ts uh i love when i have tons of pictures you never really know what the lawsuit's gonna be about when you're out there so i can't have too many photographs uh everything's digital it's cheap um you know you only have to put 12 or 15 in the report but if in your folder you've got 150 and somewhere in there is proof that what they're claiming existed never existed take lots of photographs and keep everything maintain it somewhere um this is my favorite don't tell the client uh that you're willing to buy the house if they if they're not willing right i've actually had that a couple of times as you're walking out hey so what's your final thoughts well if you don't want it i'll take it don't do that okay because that immediately tells them they don't have any more regardless of what you put in the report they don't have anything to worry about don't tell the client not to worry about the report and that you've already discussed everything that's important all right um be consistent and the last two sort of go along with each other i've had people use kind of boilerplate language where they reuse reports so there'll be clauses in there about something that doesn't apply to that house or it'll mention you know something needs repaired in one section and something's fine in another section be consistent and if you're going to reuse reports just make sure that you're you're being diligent about removing the old stuff okay so that's the end of my presentation i don't know if there's any more questions but i didn't want to just touch on a couple of those things so i do have a couple questions let me find where they went uh one says does our insurance company pay for attorney's fees or is it the individual inspector or company really good question really good question so um you you have a deductible right just like a car accident you get in a car accident even if it's not your fault well that's not quite true but if it's your fault you're going to have an you're a deductible 500 bucks or whatever you got to pay that and then everything else is you're off the hook if you're driving a car and you run over somebody um you're you're going to have to pay your deductible but your car insurance company is going to pay for all of your attorney's fees and all the money that you're gonna have to pay in that settlement or or or trial same thing as an inspector if let's assume you're at fault let's assume you did something wrong you owe money that insurance company is going to come in and they're going to take your deductible which is more than 500 bucks i think sometimes 2 grand or 2 500. you're going to have to pay that but you're never going to have to pay anything more than that you're never going to have to pay my fees you're never gonna have to pay the plaintiff that's it that's your 2500 deductible and that's it that's a really good question and and something i miss sometimes but a lot of folks don't know that and i have that discussion with people on the very first phone call to put their mind at ease because you know some people are come to me and they think they're going to lose their house or their livelihood it's not going to happen okay do not worry getting sued is not fun but if you have insurance it's it's it's uncomfortable but it's not going to change your life if you don't use an inspection agreement is that a real bad idea um in my opinion it is absolutely a terrible idea it really is and i know there are folks i've talked to people out there that say been doing this for 30 years not having one before never gonna have one not gonna start now and like i said i i you know if i had a nickel for every time somebody told me that and they you know ended up needing a lawyer i wouldn't be a rich man but it's happened um look it's just a litigious society right i mean it's just it just is i mean there are people out there that don't accept responsibility even if you put it in their report and they should have done something about it and they knew and they just got all googly-eyed about this awesome house that they're going to buy and they move forward with it anyway they're going to come back and see you right you're not their friend you no matter how friendly you got along with them out there they'll turn on in heartbeat when it comes to when it comes to dollars more than that okay see i've got uh says do i need my own lawyer who knows about home inspections even if i have insurance that will handle the claim if so why okay so in that scenario you have a insurance company who assigns an attorney to you hopefully that insurance company has assigned an attorney to you who does this more than just once a year if they don't and you're not happy with that person uh you can absolutely hire your own counsel to to review you know kind of how the case is going um that will give you a sense of security the downside of that is that's coming out of your own pocket the insurance company is only obligated to pay for that one the one the one attorney so that's a personal decision um look if you've got a question about anything at all i don't mind you emailing me and asking i'm not going to charge you to if i've made this offer to everybody if you've got an inspection agreement that you want me to look at i'll do it for free i don't care um and i'll answer some questions like that you know if i'm in for um more time if it's if you want me to be involved more than that then we can talk about how that would work but um you know if it will make you feel better you absolutely have the right to hire somebody to it's called private counsel you can do that but the downside is you got to pay for yourself well i think i heard people clapping their hands in the background that one jeff look at their inspection agreement for free that's awesome no i've actu i we did a presentation what uh three weeks ago or so and i had somebody take me up on that and i sent back my recommendations okay another question a popular thing happens in inspection industries is body cams uh yeah it says do you recommend having using body cams if so should you have a release to record in other words we're in other people's homes we're showing their house to everybody else you know that's what they're asking us yeah now that's a that's an interesting question i've never had a case with a body cam least the inspectors never told me that it was that it was used um i don't know that i really i guess it depends on the facts of the case right i mean a body cam it's like a it's like the body cams on the police shootings it depends on the facts of the case i mean uh there are some cases where the body cam is gonna you know set the police officer free and there's some that that it's not um same with same with you guys i mean assuming you guys are doing your job and everything's great body cam is just better evidence because look there are plenty of times when i'm deposing a plan up and they're saying something to me and i'm like well the the inspector told me that you know if i didn't want to buy the house did he buy it right i know that's not true i know you didn't say that right but this plaintiff can say whatever the heck they want because then i go ask you and you're like jeff i did that inspection two years ago i've done 457 inspections since then i don't even remember these people right let alone the conversation i had with them anyway um so that's a personal choice i think if you want to use a body cam i would just say you know mind your p's and q's and what you're saying when you're when you're being recorded um do you have to get a release of some kind texas is a one-party consent state you can record as long as there's one person ieu that is consenting to the to the um conversation being recorded it's permissible to not get a release from the person other states are not other states are two-party consent states and so you can get you can get in trouble for doing that um even if it's even if you're allowed to do it like in texas probably not a bad idea to tell people um i can't think of anything really negative that would happen to you except you know them getting angry but i mean i you know you're allowed to well how what's your thoughts about all the homes today having cameras in the home and when the inspector's talking to their client is there an expectancy of privacy at that stage or is everything wide open to everybody everything's wide open to everybody if you're in there there is no expectation of privacy um for anybody if you're having that conversation with them now if you're not in there they certainly have an expectation of privacy when no one else is in the house but if they're gonna say um you know paul come on in here let's talk then no you you know there's no expectation of privacy and and you would have every right t