Posted by SharonMN on 2/16/12 3:16pm
Msg #411978

Contracts and unreasonable clauses

I am periodically contacted by a title company with whom I've worked on occasion through a signing service, asking me to become one of their vendors. Unfortunately, we are never able to agree on terms. One of the terms in their most recent contract is as follows (my comments are in brackets). Signing agents, please be careful and make sure you don't agree to terms that don't make sense from a business perspective. It's one thing to agree to redo the signing or waive your fee if you make a mistake, but in this case, had I signed the contract as written, I would be taking on virtually unlimited liability in exchange for perhaps $500 worth of business a year. No thanks.

“If you fail to adhere to the above requirements, you agree that it is your responsibility to immediately secure a duplicate security instrument [***fair enough***] and arrange for the recording of the same [***not part of my job***]. You agree to pay or satisfy any intervening liens resulting from your failure to comply with the package shipment instructions. [***DEFINITELY NOT!***]”

Reply by Linda_H/FL on 2/16/12 3:19pm
Msg #411982

"You agree to pay or satisfy any intervening liens resulting from your failure to comply with the package shipment instructions."

Wow....

Reply by MW/VA on 2/16/12 3:26pm
Msg #411984

That sounds like the contract was drawn up with abstractors in mind, not signing agents.
IMO, I would have stricken any clauses that I couldn't/wouldn't commit it.

Reply by ReneeK_MI on 2/16/12 4:26pm
Msg #411992

I just refused one for a 5-star T/C ...

I'm NOT an attorney, and not hiring one to scope out a contract - but this Indemnification clause left me less than comfortable. The first half is what scares me, it doesn't (IMO) clearly indicate that indemnification would ONLY be provided if I was negligent.

Indemnification. Service Provider agrees to indemnify
and hold harmless (name of T/C) its successors, assigns,
affiliates, and their respective clients, directors,
officers, employees, agents, and subcontractors from
and against any and all action or threatened action,
suits or proceeding arising out of or related to Service
Provider's performance of its obligations under this
Agreement{emphasis here is mine} AND against any and all claims, losses,
costs, and expenses that result from Service Provider's
negligence, or willful or intentional acts or failure to act
in performing and providing the Services pursuant to
this Agreement. This section shall survive the
termination of this agreement.

Reply by SharonMN on 2/16/12 5:55pm
Msg #412007

Re: I just refused one for a 5-star T/C ...

Renee - I agree. I won't sign any indemnification language, either. I always limit my liability to the amount of my fee. After all, FedEx and UPS do the same (you'll see in the tiny print that they will not accept liability for any consequential damages).

MW/VA - I did strike out language I wasn't comfortable with. They said I have to sign it as is. I said feel free to request me through the signing service, then.

Reply by Linda_H/FL on 2/16/12 6:20pm
Msg #412009

See, I might have signed this...simply because of

the wording "..... arising out of or related to Service
Provider's performance of its obligations under this
Agreement{emphasis here is mine} ... AND against any and all claims, losses,
costs, and expenses THAT RESULT FROM (my emphasis) Service Provider's
negligence, or willful or intentional acts or failure to act
in performing and providing the Services pursuant to
this Agreement. This section shall survive the
termination of this agreement."


All you're doing is indemnifying them against any errors you make IMHO - which is what you'd do anyway and if your acts result in financial losses to them, their client or their borrowers then, yes, they'll want to look to you since it was a result of your bad acts or your negligence.

I'd sign this simply because, of course, I'm going to indemnify them against mistakes I, myself, make.


JMHO

Reply by Pat/IL on 2/17/12 1:12am
Msg #412032

Read your E&O policy before you sign.

A standard E&O policy may not cover you for liability that you accept, that you would not already be liable for by law if you had not agreed to additional liability. Read your policy to be sure.

That language might sound innocuous, and you may never ever make mistakes, but if somebody says you did, and others need to be defended because somebody says you did, who will be paying for all of those fancy defence lawyers?

Reply by Linda_H/FL on 2/17/12 7:56am
Msg #412043

The E&O is only going to cover for notarial errors anyway

not anything I do connected with loan signings.

"but if somebody says you did, and others need to be defended because somebody says you did, who will be paying for all of those fancy defence lawyers?"

Not me if I didn't - if I did make such a mistake that it caused financial harm then, yes, I'd be on the hook for all of it - but if I didn't make the error - well, burden of proof and all that rot, including attorney's fees in defending a baseless claim.

Reply by ReneeK_MI on 2/17/12 6:03am
Msg #412037

I just don't think that's made absolutely clear

I don't think the wording itself limits indemnification to my negligence, that's what I have a problem with. It's that single word "And" that clouds it up.

"Indemnification. Service Provider agrees to indemnify and hold harmless (name of T/C) its successors, assigns,affiliates, and their respective clients, directors, officers, employees, agents, and subcontractors from and against any and all action or threatened action, suits or proceeding arising out of or related to Service Provider's ***performance of its obligations*** under this
Agreement..."

This first half (of the winner of run-on sentences!) doesn't say anything about negligence, doesn't put any limitations at all. Taken literally (as it should be), it could hold me liable for any issue caused by ANYONE on any signing I "perform" my obligations on.

It continues with the word "AND" ... the second part does put appropriate limits to my own negligence, and I have no problem with that part. That word "And" makes this a two-part equation, the first liability AND the second liability (again, just IMO, but I'm not paying to run this past an attorney).

"... AND against any and all claims, losses, costs, and expenses that result from Service Provider's negligence, or willful or intentional acts or failure to act in performing and providing the Services pursuant to this Agreement. This section shall survive the termination of this agreement."