Samson Sales, Inc. v. Honeywell, Inc.

465 N.E.2d 392 (1984)

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Nature of the Case

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Facts

P entered into a contract with Morse to install a burglar alarm system at P's pawn shop. P paid $1,500 and $150 each month thereafter for a period of five years. Morse was purchased by the Honeywell, (D) which assumed responsibility under the agreement. A burglary occurred at P's business, and D refused to pay any more than $50 toward the loss. P sought damages in the amount of $68,303 for loss of merchandise. P alleged negligence for D's failure to transmit a burglar alarm signal to the police. D claimed that its liability, whether based upon negligence or breach of contract, was limited to liquidated damages in the amount of $50 as set forth in Paragraph (18) of the contract. The court entered a summary judgment for P, but limited damages to the sum of $50. P appealed, and the court of appeals rested its conclusion upon two grounds: (1) that the provision for liquidated damages, under the facts of this case, was in the nature of a penalty, and (2) that the small standard print of the contract, as prepared by Morse, provided 'an irreconcilable internal contradiction between the clearcut promises found in paragraph 8 and the exculpatory clause which modifies the substantive provisions of paragraph 18.' D appealed.