Summary
In McCarthy, we held that the district court properly excluded a contractual defense to a negligence claim because the relevant exculpatory clause was unconscionable and invalid.
Summary of this case from Carlson v. BartaOpinion
No. C6-85-1740.
June 10, 1986. Review Granted August 20, 1986.
Appeal from the District Court, Nicollet County, L.J. Irvine, J.
Michael A. Nekich, Robert P. Thavis, Leonard, Street Deinard, Minneapolis, for appellant.
W.M. Gustafson, Michael K. Riley, MacKenzie, Gustafson Lucas, St. Peter, for respondent.
Heard, considered and decided by PARKER, P.J. and LANSING and CRIPPEN, JJ.
OPINION
St. Peter Creamery, Inc., hired McCarthy Well Co., Inc., to restore the flow in an artesian well that supplied water to the Creamery. McCarthy Well took measures to increase the flow, including replacement of the well's pump. The Creamery made partial payment, and McCarthy Well sued to collect the balance. The Creamery counterclaimed, alleging negligence in the installation and removal of the pump. The jury found in favor of the Creamery, and McCarthy Well appeals from the judgment and an order denying a new trial. We affirm.
FACTS
McCarthy Well services and repairs large industrial and municipal wells and well pumps. St. Peter Creamery processes liquid milk products into powder. The Creamery's drying process uses large amounts of water to evaporate and cool the milk products. Until 1979 the Creamery obtained most of its water from an artesian well with a centrifugal pump located within the plant. At that time the Creamery doubled its processing capabilities, which increased its need for water. The artesian well's flow had decreased, and the Creamery's water supply had to be supplemented with city water.
A representative of McCarthy Well made a free inspection of the Creamery's well in April 1979. In June the Creamery wrote McCarthy Well inquiring whether they could restore the artesian well to its original capacity. After discussions between McCarthy Well's sales representative and the Creamery's manager, McCarthy Well mailed the Creamery a form "Acknowledgment of Order" and accompanying rate schedule. The reverse side of the acknowledgment contained provisions in extremely fine print broadly limiting liability.
On August 28 McCarthy Well began testing the well. After removing the pump and the copper liner, it "airlifted" sand out of the bottom and "televised" the well. The airlifting produced little sand, so McCarthy Well exploded a 20-pound charge of dynamite at the bottom of the well, which increased the flow of water. McCarthy Well then recommended and installed a new turbine pump. The installation was completed on October 24, 1979.
In November 1979 McCarthy Well billed the Creamery for $34,573.27. The Creamery made only partial payment. In March 1980, McCarthy Well sued to recover the balance. A short time later the pump shaft broke, and McCarthy Well repaired it. The Creamery then asserted its counterclaim for negligence and for misrepresentation of the amount of time the job would take.
The pump's shaft broke again in April 1980, and McCarthy Well repaired it once more. When it broke again in August 1980, the Creamery hired the St. Peter Well Co. to install a new pump. The second pump lasted until January 1981, and televising performed at that time revealed a hole in the well casing. The Creamery ultimately dug a new well and installed a new pump in the summer of 1981.
The Creamery claimed the lack of water during certain periods of time damaged its product, and sought the difference between the price it received for the damaged product and the price the product would have sold for had it not been damaged. The jury awarded McCarthy Well $29,573, the amount McCarthy Well claimed was owed plus interest. The jury also found the Creamery sustained $190,000 in damages as a result of McCarthy Well's "negligence" in performing its work and apportioned 75 percent of the fault to McCarthy Well and 25 percent to the Creamery. The trial court ordered judgment in the amount of $113,926 and denied McCarthy Well's motion for a new trial.
ISSUES
1. Does the Superwood doctrine preclude an action for economic loss arising entirely from the negligent performance of services?
2. Did the trial court abuse its discretion in excluding evidence of the terms and conditions of the parties' contract?
3. Did the Creamery's late disclosure of specific claimed acts of negligence and of an expert witness it intended to call at trial prejudice McCarthy Well?
4. Is the record sufficient to review McCarthy Well's claim that the trial court erred in questioning the jurors about their possible affiliation with McCarthy Well's insurer?
5. Did the trial court err in instructing the jury on damages, refusing to find the special verdict inconsistent, or in refusing to reduce the damage award?
6. Is the evidence sufficient to support the verdict?
ANALYSIS I
McCarthy Well argues that Superwood v. Siempelkamp Corp., 311 N.W.2d 159 (Minn. 1981), prevents the Creamery from recovering economic losses under a negligence theory. In Waldor Pump and Equipment Company v. Orr-Schelen-Mayeron and Associates, 386 N.W.2d 375 (Minn.Ct.App., 1986), we held that Superwood did not limit the legal remedies of individuals economically injured by the negligent performance of professional services. Our holding in Waldor Pump applies equally to this case because the damages claimed by the Creamery result not from failure of a product, but from negligent performance of services. See also Valley Farmers Elevator v. Lindsay Brothers Co., 380 N.W.2d 874 (Minn. Ct. App. 1986), pet. for rev. granted, (Minn. April 11, 1986).
While the Creamery's counterclaim essentially alleged "negligent breach" of contract, McCarthy Well did not argue at trial that the counter. claim was in contract rather than in negligence; nor did McCarthy Well object to apportionment of fault. Submission of the negligence claim to the jury rendered it the law of the case. See Lesmeister v. Dilly, 330 N.W.2d 95, 102 (Minn. 1983). To that extent, this is a "negligence" case, and Superwood does not preclude the recovery of these "economic losses." If the Creamery's counterclaim had been submitted on a breach of contract theory, consequential damages could have been recovered if contemplated by the parties as a probable result of a breach. See id. at 103.
II
The trial court ruled inadmissible the reverse side of the Acknowledgment of Order form, which contained an exculpatory clause stating McCarthy Well would "not be liable for * * * damages or liability of any nature whatsoever arising or growing out of contractor's work. * * *." (See Appendix A). The court excluded the reverse side of the form because it was illegible.
Although not expressly stated as such, the trial court's ruling was apparently based on a theory of unconscionability. See Restatement of the Law (Second) Contracts, § 208 (1981). While exculpatory clauses between private parties are not per se unenforceable and their validity has been recognized in certain circumstances, Solidification, Inc. v. Minter, 305 N.W.2d 871, 873 (Minn. 1981), the manner in which these one-sided provisions appear may constitute unfair surprise or unconscionable oppression, even when both parties are businesses. See Architectural Cabinets, Inc. v. Gaster, 291 A.2d 298, 301 (Del.Super. 1971) (confession of judgment clause written in fine print held unconscionable); Weaver v. American Oil Co., 257 Ind. 458, 461, 276 N.E.2d 144, 147 (1971) (indemnification clause in lease unconscionable because, in part, "the clause was in fine print and contained no title heading which would have identified it as an indemnity clause").
In this case the provisions limiting McCarthy Well's liability are written in miniscule print; the form itself contains over four thousand words. No title headings or bold print alerted the Creamery to the release from liability. Rather, these terms appear on the middle of the form, not set apart from the form's other provisions. Under these circumstances, the trial court did not err in excluding the terms on the back of the acknowledgment form.
Furthermore, exculpatory clauses are invalid if they purport to exonerate a party from willful or wanton recklessness or intentional torts. Schlobohm v. Spa Petite, 326 N.W.2d 920, 923 (Minn. 1982). Exculpatory clauses will be strictly construed against the benefited party. Solidification, Inc. v. Minter, 305 N.W.2d 871, 873 (Minn. 1981). Here, the exculpatory clause was not strictly limited to liability for acts of negligence, but provided exculpation from "any * * * damage or liability of any nature whatsoever arising or growing out of [McCarthy Well's] work hereunder." The wording of this clause apparently covers damages arising from even recklessness or intentional conduct of McCarthy Well. Strictly construed, this clause is not limited to the permissible exoneration from liability for negligence and hence is invalid. See Schlobohm, 326 N.W.2d at 923.
III
McCarthy Well next contends the trial court abused its discretion in permitting testimony about claimed acts of negligence identified in the Creamery's amended answers to interrogatories dated six days before and received five days before trial. McCarthy Well also objects to the trial court's decision to allow St. Peter Well Co.'s Joel Schaffer to testify as an expert witness. Schaffer had previously been deposed as a fact witness; notice that he would testify as an expert was received the same day as the amended answers. The trial court excluded the testimony of two other experts who had not been previously deposed and were identified as expert witnesses a week before trial.
McCarthy Well argues that it lacked sufficient notice of the claims the Creamery intended to argue at trial. In fact, of the five claims of negligence specified in the Creamery's amended answers, two were identified in 1980 in the Creamery's original answers to McCarthy Well's interrogatories. The other three claims (failure to plumb the well before installing the pump, failure to inspect the casing after blasting, and excessive use of dynamite) were alleged, in general terms, in the Creamery's counterclaim, which stated that McCarthy Well negligently installed the new pump and removed the old one.
In depositions of McCarthy Well's foreman and superintendent, the Creamery's lawyer extensively inquired about the use of dynamite. The foreman and Joel Schaffer were similarly questioned about the failure to plumb the well and the implications of that failure. For these reasons, we conclude that the disclosure of specific allegations of negligence five days before trial did not render the Creamery's original answers inaccurate, untrue or incomplete and consequently did not inject an element of surprise into the trial. See Gebhard v. Niedzwiecki, 265 Minn. 471, 477, 122 N.W.2d 110, 114 (1963).
The decision to permit the use of expert testimony, even on short notice, is within the trial court's discretion. Cornfeldt v. Tongen, 262 N.W.2d 684, 697 (Minn. 1977). Exclusion is justified only when prejudice would result. Dennie v. Metropolitan Medical Center, 387 N.W.2d 401 (Minn. 1986). Here, Schaffer had been deposed as a fact witness and was questioned about the hole in the casing and the need to plumb the well. He stated his opinion that McCarthy Well initially should have plumbed the well. Thus, McCarthy Well was put on notice of the "well plumbing" issue and was not prejudiced by the trial court's decision to allow Schaffer's opinion testimony as an expert.
IV
Rule 31, Part I, of the Code of Rules for the District Courts permits the trial court to examine jurors about their contacts with an insurer not a party to the action if the insurer is "interested" in the defense or outcome of the action. See also Hardware Mutual Insurance Co. v. Danberry, 234 Minn. 391, 401-02, 48 N.W.2d 567, 573 (1951). The propriety and necessity of examining jurors about their potential affiliations with an insurer rests in the discretion of the trial court. Viou v. Brooks-Scanlon Lumber Co., 99 Minn. 97, 107, 108 N.W. 891, 895 (1906).
The pretrial conference in which the trial court obtained the name of McCarthy Well's insurer and discussed the insurer's interest in the action was not transcribed. McCarthy Well moved to correct the omission in the record and was directed by this court to obtain a statement of proceedings under Minn.R.Civ.App.P. 110.03. The trial court judge has since moved to California, and McCarthy Well did not attempt to submit a proposed statement of proceedings to him. The parties submitted conflicting affidavits on the pretrial conference proceedings.
When part of a transcript which forms the basis for an appeal cannot be obtained, we must determine whether the question on appeal can be adequately presented without the missing portion of the transcript. Soukup v. City of Sleepy Eye, 281 Minn. 144, 146, 161 N.W.2d 36, 37 (1968). Here, the absence of the transcript prevents us from determining what facts the trial court possessed that led him to examine the jurors about McCarthy Well's insurer. The parties disagree whether the court was told that coverage was in question or that no claim had been made at all. When no approved statement of proceedings has been obtained, for whatever reason, this court cannot attempt to harmonize factual disputes that form the basis of a claim on appeal. Soukup; see also 3 Magnuson, Herr and Haydock, Minnesota Practice § 110.11, at 291 (West 1985). In an area committed to the discretion of the trial court, this record is insufficient to find an abuse of that discretion.
The missing transcript is not required to preserve McCarthy Well's challenge to the voir dire because McCarthy Well's motion for a mistrial immediately after the allegedly improper examination of the jurors is sufficient to preserve the point for appeal. Rosenthal v. Kolars, 304 Minn. 378, 380-81, 231 N.W.2d 285, 287 (1975).
V
A. McCarthy Well claims that the trial court erred in failing to instruct the jury on the duty to mitigate damages. It did, however, instruct the jury on comparative negligence. Therefore, the court's instructions did take mitigation into account and were not erroneous.
McCarthy Well also argues that the trial court abused its discretion in sustaining the Creamery's relevancy objection during McCarthy Well's cross-examination of a Creamery official. McCarthy Well claims that it made an offer of proof relating to mitigation of damages; that offer of proof was not transcribed. The Creamery's counsel does not recall the substance of that offer of proof. We cannot harmonize conflicting accounts of a bench conference where no approved statement of proceedings exists. See Part IV, supra.
B. The verdict is not inconsistent. The jury found for McCarthy Well on its collection claim and awarded it the full amount requested. McCarthy Well argues this aspect of the verdict is inconsistent with the finding that it was negligent. The trial court instructed the jury to separate the negligence issue from the collection issue. The jury, therefore, did not consider either party's negligence when determining the reasonable value of McCarthy Well's services.
C. The award of damages was not excessive or contrary to the evidence. The Creamery claimed damages of $216,499; the jury found damages of $190,000. McCarthy Well argues that to arrive at the $190,000 figure, the jury necessarily and erroneously took into account losses sustained by the Creamery before the pump broke for the first time. The verdict form did not require the jury to explain how it arrived at the damages figure. The jury could have considered other damages, such as repair costs, in reaching its verdict. Those costs, rather than passion or prejudice, may be the basis for part of the damage award. See Kinikin v. Heupel, 305 N.W.2d 589, 596 (Minn. 1981).
VI
McCarthy Well argues that the jury's verdict was not supported by the evidence. There was conflicting testimony as to whether the casing could have been damaged by the dynamite, and as to whether McCarthy Well's method of plumbing the well was acceptable practice. The jury also heard McCarthy Well's witnesses state that the Creamery's practice of grounding the plant's electricity through the well caused the holes in the casing. We cannot say the verdict was palpably contrary to the evidence. See Hauenstein v. Loctite Corp., 347 N.W.2d 272, 275 (Minn. 1984).
DECISION
Affirmed.
APPENDIX A THY WELL COMPANY STANDARD GENERAL TERMS AND CONDITIONS (Revised Edition 1964) (McCarthy Well Company is hereafter sometimes referred to as "Contractor", "he", "it", and their possessive.)Except as modified by may provision appearing on the face hereof or appearing in the exhibits referred to or attached hereto, the following terms and conditions shall apply:
1. The Contractor shall: (a) If he is to perform labor: (1) provide supervision, and use such of his skill and efforts as are, in his sole opinion, necessary to accomplish the work undertaken: (2) carry, on his own men, Workmen's Compensation and Liability Insurance; and (3) supply experienced and competent labor; (b) If he is to furnish equipment, provide suitable and adequate equipment for the performance of the work; (c) If he is to furnish materials. Contractor will order such materials, equipment and tools as in his judgment are required for the performance of the work hereunder and all of same will be invoiced to Owner at Contractor's regular selling or rental price, as the case may be, at time of shipment, plus (1) freight from point of origin to stated delivery point (2) all handling charges or their equivalent and (3) taxes on sale, delivery or use thereof; (d) Commence operations as promptly as possible and place orders for material required and diligently prosecute the work until completed: (e) Upon completion of the work, remove his own equipment and material except as qualified in "2(d)".
Should the Owner object to the competence, or other behavior, of any of the men on the job, or should the Owner make any claim that the equipment on the job is inadequate and unsuitable, then the Owner shall immediately notify the Contractor of his complaints, in writing, specifying particularly his objectives to the man, or men, or equipment, and the Contractor will then, upon receipt of such notification, examine into the Owner's complaints and the reasons assigned therefor and, if the Contractor deems the said complaints to be reasonable, he will then substitute for the man, or men, or equipment complained of. Until receipt of any such notice in writing, the owner shall be liable for the hourly charges, subsistence and travel for all men and all charges for equipment. In the event that any equipment is substituted as a result of the foregoing notice by the Owner, then the Owner will be liable for the cost of moving the substituted equipment back to Contractor's warehouse and for the cost of moving the substitute equipment to the job, the same to be calculated according to the Contractor's then prevailing rates for such movement of equipment.
2. The Owner agrees to:
(a) Pay the amounts indicated on the face hereof, on exhibits referred to or attached, and those amounts specified herein.
(b) Select the location of the well, test hole or work sites, and take full responsibility for selection of the same; any statements made by the Contractor are suggestions only and shall not be construed as representation as to where the hole should be drilled.
(c) Promptly provide, without charge to the Contractor: (1) adequate space for ingress and egress including adequate and suitable access roads and for the setting and operating of the Contractor's equipment and materials at the immediate well or work site: (2) whatever water or hauling thereof is necessary at or to the immediate well or work site; and (3) whatever power, wiring, hook-up, pits, foundations, pump house, piping and lights, etc. may be required at the immediate well or work site.
(d) Make arrangements for the disposal of debris, water and waste produced as a result of work performed by the Contractor hereunder.
(e) Obtain all the necessary authority, rights, and permits to drill, for the work to be performed hereunder (including, but without limiting the same, such rights and permits for the location selected, passage of emergency resolutions required for the work covered by the order, certificates as to availability of funds to pay for amounts required hereunder, etc. Any defects in or failure to obtain any such rights, permits, etc. shall not prejudice the Contractor's rights to receive payment for the work done.
(f) Pay for any consulting engineering service which Owner may employ or that may be required.
(g) Pay any additional charges for any extra work, materials, equipment or special tools or rentals thereof that are necessary or ordered, in accordance with the terms and conditions applicable to the work originally ordered.
(h) Reimburse Contractor for the reasonable value of any of the Contractor's in-hole equipment and material that is lost or destroyed in the performance of the work hereunder.
(i) Pay the Contractor's standard charge for men and equipment for any and all waiting or shut-down time for men and equipment, or for equipment only, as the case may be due to:
(j) Bad weather, (ii) Awaiting arrival of repair parts, additional materials, or equipment: (iii) Awaiting decisions of the Owners; (iv) and the like.
The maximum charges for waiting time shall be limited to 8 hours per day, six days per week for the men and equipment on the job site, plus living expenses for such men.
Should the men be taken off the job during a shut-down period, then the Owner shall be liable only for (1) the time consumed at the hourly rate and (2) living expenses and (3) the mileage charge for each man in going from the job site to the Contractor's warehouse and service and return, and also (4) the stand-by rates for equipment.
Stand-by rates for equipment only shall be 50% of the applicable standard hourly rates for men and equipment.
(j) Pay any State tax imposed upon the Contractor in connection with the work performed hereunder, excluding, however, any income taxes.
(k) Pay any premium for bonds required of Contractor.
(l) Save the Contractor harmless in the event of accidental damage to crops, buildings, trees, fences, walks, or any other properly upon or adjacent to such site.
3. With respect to work, or any portion thereof, that is to be performed on an hourly basis, the following special provisions shall be additionally applicable:
(a) A work-week shall be a minimum of 45 hours (except in metropolitan Minneapolis and St Paul where it shall be 40 hours), all time to be reckoned from the time when the men leave the service stations location and to cease on the return thereto.
(b) Straight time hourly rates quoted or appearing on the face hereof or on exhibits specified or attached are based on a 5-day 40-hour week, Monday through Friday. 8:00 A.M. to 4:30 P.M., except holidays or days celebrated as such. Overtime rates for overtime each day and Saturday will be reckoned at 1 1/2 times the straight time rates quoted for both men and equipment, and, for Sundays and holidays, 2 times the straight time rates quoted for both men and equipment.
(c) The Owner shall pay for all time spent by Contractor's employees on the well or pump, etc., or attempt to repair the same, at the applicable rates for the men and equipment on the job, and for all time consumed or expense or cost incurred in connection therewith, including, but not limited to any time spent in connection with the job for the following. Unloading and loading trucks at Contractor's warehouse, the job site or carrier's freight dock, moving equipment, materials, etc., from Contractor's warehouse or other location to the site and return; cleaning, repairing, rigging up, setting and removing pump, testing, hook-up, loading of shells, shooting, tearing down equipment; fishing for tools already in the well or that may become lost in the well; machine shop work; final tests or checks; or any other work which, in the opinion of Contractor, was required for prosecution of the work. Except as herein otherwise stated, charges for men and equipment will be made for the full time that equipment is on the job with the men, regardless of whether equipment is in operation or not.
(d) All work will be invoiced and paid per the hourly rate price schedule and in accordance with the provisions hereof, expenses incurred and materials used. There shall be an additional charge for all transportation costs for men, tools, equipment, pipe or any other material which may, in Contractor's opinion, become necessary from time to time to accomplish the work, and the same shall be reckoned from the point of the manufacturer's or Contractor's warehouse to the sale of the work and return, whichever is the greater.
(e) The Owner shall reimburse Contractor for all out-of-pocket costs in connection with long distance telephone calls, telegrams, etc., made in connections with the ordering of materials or the performance of the work hereunder.
(f) The Owner shall have the option and privilege of stopping the work or attempted repair to the well or pump or the drilling of a new well, as the case may be at any time that the Owner sees fit to do so, by giving written notice to the Contractor, but in such event, the Owner shall:
(i) Pay to Contractor the unpaid charges for the portion of the work completed to the date of cancellation, or otherwise properly attributable to the work; plus moving out charges, etc.
(ii) Pay to the Contractor such amount as will compensate Contractor for his out-of-pocket losses, such as tools left in the hole. etc. and for all obligations which Contractor may have properly incurred to subcontractors, material vendors or others in connection with the work, including all damages incurred to such parties as a result of said cancellation: and
(iii) Pay to Contractor, in addition to the foregoing, the amount of profit which Contractor would have made on the job, the Owner and the Contractor acknowledge that the amount of such profit will be difficult to determine and agree that the amount of the same shall be liquidated at 20% of the estimated or firm price quoted, whichever is the case.
4. Owner shall:
(a) Make payment to Contractor in cash immediately upon receipt of invoice from Contractor, in amount of 90% of invoice. Contractor shall have the right to render invoices as often as he wishes for work done and material furnished, e.g., he may do so daily, every two days, every three days etc.
(b) Pay the retained balance of 10% in cash within 30 days of the completion or discontinuation of the work.
(c) ??? payments until paid, and if ??? legal proceedings be required to enforce the payment of any amount due of to enforce any other provisions of the contract, or to sue on account of any breach thereof, to pay reasonable attorneys fees and costs incurred by ???
(d) In addition to all the other remedies which he has hereunder. Contractor, in the event that the Owner fails to make payment as above, or as otherwise specified on the face hereof or on the exhibits attached or named herein shall have the right to suspend work until receipt of payment and, if the Contractor so does, then he shall be additionally entitled to stand-by charges as hereinbefore specified during and for the time of such suspension.
5. Title to all materials, well, or any other equipment or materials furnished and any replacement thereof or substitution therefor and the right to the use thereof shall remain in Contractor until all payments due hereunder, including deferred payments and all payments on notes given for purchase money and renewals thereof, shall have been fully made in cash, and all such equipment and material described shall be and remain the personal property of the Contractor regardless of the mode of its attachment to the realty or other property until all of such payments shall have been made in cash, providing, however, that upon and after full payment in cash the above described well and or materials shall be considered as fully paid for and become the property of Owner Until the title shall pass to Owner by payment of complete purchase price. Owner agrees, at Owner's expense, to keep all materials, well and equipment insured against loss under an all-risk policy, including, but not without limiting the foregoing, fire, theft, vandalism, etc. with loss payable to Contractor as his interest may appear, and Owner shall keep the same free form all liens or encumbrances, shall not move same from the site where first installed or used, shall pay all taxes thereon, shall make good all loss, damage, or deterioration thereto; and shall take all steps, by way of making and filing or recording additional instruments or otherwise necessary to preserve Contractor's title.
If this Paragraph 5 or any portion thereof be invalid for any reason, then the same or such portion only as shall be invalid, shall be inapplicable and shall not affect the validity of the other parts of this paragraph "S" or any of the other paragraphs of these Standard General Terms and Conditions.
6. (a) The Contractor shall not be liable for injury to persons, including wrongful death or damage to property, resulting from or attributable to performance of the work hereunder either during or after the work performed hereunder. Owner agrees to indemnify and hold harmless Contractor for and against any such liability. In amplifications, but not in limitation, of the foregoing unqualified release from and indemnification against liability. Contractor shall not be liable for, and Owner agrees to indemnify Contractor against and hold Contractor harmless as to:
1. Any damage, directly or indirectly, resulting from injury to any existing underground installations at the site of the work or adjacent thereto or in the vicinity thereof, including, but not limited to, sewers, water and gas maine, conduits, overhead power lines, foundations of overhead towers and tanks, etc.
2. Any damage whatsoever, including loss, theft or vandalism, that may be caused to any pumphouse, well, well materials, pump or parts thereof water system or water supply, etc., or to any of the Owner's equipment in the Contractor's care, custody or control.
3. Any infringement on water rights of Owner or others caused by operation of water well or wells installed by Contractor.
4. Any damage resulting from (i) the breaking or the losing of tools in the well, (ii) dynamiting, (iii) shooting, (iv) casing collapse, (iv) the failure to repair said well or pump, or (vi) any like cause.
5. Any damage or loss suffered by Contractor to the Contractor's work in progress, equipment or other material at the job site resulting from theft, vandalism, and the like.
6. Any other damage or liability of any nature whatsoever arising or growing out of Contractor's work hereunder.
7. Any subsurface damage or injury to the well, or surface damage arising out of such subsurface damage or injury to the well, irrespective of the cause, that may result from Contractor's performing or attempting to perform the work hereunder, and the Owner shall absolve and hold Contractor harmless from all loss, costs, damages and expenses, incurred by Owner or by any third party, irrespective of cost, resulting from any subsurface damage or injury to the well or resulting from surface damage arising out of such subsurface damage or injury to the well.
(b) Contractor shall not be liable for any failure or delay due to catastrophe, fires, strikes, lock-outs, labor conditions, acts of God, unavoidable accident, riot, war (whether declared or undeclared), or by the enactment of any municipal, state or federal ordinance or law or by the issuance of any executive or judicial order or decree, or by any other legally constituted authority or any other causes clearly beyond the control of Contractor.
(c) Contractor shall not be liable (1) for any repairs or alterations, or (2) for damages or delay where caused by defective material or its workmanship or otherwise.
(d) In no event shall Contractor be liable to the Owner for special or consequential damages.
7. (a) Contractor does not make any guaranty or give any warranty covering the equipment, machinery, apparatus, accessories, materials or suppliers furnished and nothing herein shall oblige it to bear the cost of any labor or materials in the replacement or repair of defective parts and with respect thereto the guaranties and warranties of the manufacturers thereof, if any, must be resorted to by the Owner.
(b) Contractor in no way assumes any responsibility or liability with respect to use, purpose or suitability of material and equipment furnished and shall not be liable for any damages of any character, whether direct or consequential, resulting from use of such materials and equipment.
(c) Unless specifically stipulated on the face hereof to the contrary, it is understood and agreed by both the Owner and the Contractor does not agree to find or develop water, or does he represent, warrant or guarantee the quality, length of service, quantity or kind of water, if any, which may be encountered. Failure to strike or develop water shall, in no way, release the Owner from liability for the full amount of the Contractor's invoices and compliance with all the terms and conditions hereof.
(d) It is understood and agreed that because of uncertainty and or unknown conditions existing in well drilling, well repairing pump repairing and the like. Contractor, being subject to such conditions, does not make any guarantee as to work performed or results thereof, and all operations are at risk of Owner.
8 The work to be performed and materials and equipment to be furnished by the Contractor is based upon the available information as to the underground formations and the conditions that may be encountered including information supplied by the Owner as to the same. Should actual conditions or formations be different from those anticipated, then Contractor is authorized, without prior approval by the Owner, (1) to make the necessary modification to accommodate the work to the conditions encountered, including, but not without limiting the same, changing the diameter of the casing and screen sizes, and pump size and capacity, from those originally specified or contemplated, without thereby effecting any reduction in the price specified for a different size. (2) to increase the amount to be charged to Owner as may result from the Contractor's unexpected and additional expenditure for and use of equipment, labor and materials to overcome and adapt the performance of the work to the conditions that are actually encountered.
9. Contractor, without any lability hereunder of any kind whatsoever to the Owner, may terminate this contract for any of the following reasons:
(a) If it encounters any qranite, quartzite, igneous. Archean or like rock formation.
(b) If at any time it is of the opinion that the project will not, in Contractor's sole opinion, achieve the desired results without unreasonable effort and expense, or is hopeless and further work thereupon useless.
(c) If it is found impossible or impracticable in Contractor's sole opinion to proceed with work.
(d) If the Owner unreasonably delays, Contractor in the prosecution of the work or is guilty of other substantial breach of this contract or if the work is stopped under an order of any Court or other public authority for a period in excess of thirty days.
(e) If, in the Contractor's sole opinion and judgment, the selection of the well site presents obstacles not originally contemplated by the Contractor, or entails difficulties not anticipated by the Contractor, including, but not limited to, lack of free access to the job site, interference presented by existing installations at the job site, insufficient space for the Contractor to set up and operate its equipment, poor road access to job site, etc.
In the event of termination because of any of the foregoing events. Owner shall pay to Contractor (1) the unpaid charges for the portion of the work completed to the date of such termination or otherwise properly attributable to the work, including any charges attributable to test wells; (2) such amount as will compensate Contractor for out-of-pocket losses, such as tools left in the hole, etc. and for all obligations which Contractor may have properly incurred to subcontractors, material vendors or others in carrying on the work, including all damages incurred to such parties as a result of said termination; and (3) pay to Contractor, in addition to the foregoing, the amount of profit which Contractor would have made on the job; the Owner and the Contractor acknowledge that the amount of such profit will be difficult to determine and agree that the moneyed of the same shall be liquidated at 20% of the estimated or firm price quoted, whichever is the case.
10. (a) It is understood that this order and that the attached or mentioned exhibits. If any, contain the entire agreement between the parties hereto and that no warranty, express or implied, and no representation or other promises, statements or inducements, have been made by either party hereto or by any agent or employee of either party which are not contained in this agreement.
(b) This order supersedes all previous proposals and contracts.
(c) Should the work be shut down over the week-end during normal progress of work and should any of the men whether foreman assistant or worker return to their homes, then Owner shall reimburse Contractor for the aggregate mileage at mileage rate specified on the face hereof, or on any exhibit referred to or attached hereto, traveled by such foreman, assistant and worker in going from job site to their homes and return.
(d) Owner shall assign or appoint someone to sign the Daily Field Report each day which will be Contractor's authority for invoicing the number of hours as shown on the said reports. Should Owner fail to assign or appoint someone so to do, or should such appointed person be unavailable so to do for any reason or unreasonably refuse to sign any such reports, then the reports submitted to Contractor by its foreman on the job shall be conclusive on the Owner, with respect to the number of hours shown thereon. Contractor's time records for work done in the shop or away from the job site shall be authority for Contractor to invoice the Owner for the number of hours shown thereon.
(e) The person or persons designated by the Owner to sign the aforementioned reports or to select the drilling or job site for the repair of any well or pump shall be deemed to have authority so to do, and Contractor need not inquire into or verify the same until notified by Owner in writing that the authority has been revoked.
(f) Owner shall notify Contractor of any claimed defects in the work performed or materials furnished within ten days after Contractor has removed its equipment from the job site. Failure so to notify Contractor shall constitute a waiver by Owner of any such claims and shall be deemed an unqualified acceptance of the work performed and materials furnished under the contract.
(g) Unless the Owner gives Contractor instructions in writing with respect to the dimensions of the screen and the size of the slot thereof, such selection shall be made by the Contractor. In the event that Contractor makes such selection, either based/upon his own judgment or upon the recommendations of the manufacturer of the screen, then such selection shall be final and conclusive upon Owner and shall be deemed to be satisfactory to the Owner. In the event that the construction of the well is of such a type as to require the pulling back of casing to expose screen to water-bearing formation, it is recognized that such a procedure is a hazardous undertaking, subject to many unexpected conditions, and the failure of Contractor fully to expose the screen to the water formation shall not render or subject Contractor to any liability on account thereof, nor relieve Owner from obligation to pay for full price of said screen, now from obligation to pay for the work performed by Contractor.
(h) No modification hereof may be made except upon the written approval of an authorized officer of Contractor.
(i) Inasmuch as many of the conditions are unknown in advance as to work that will have to be done is Contractor's attempt to perform hereunder, it is understood that Contractor shall not be liable for completing the work within the estimated price or estimated time. Any estimate or estimates that are made by Contractor are understood to be only a guide and any wording on the face hereof or in any other writing or otherwise, such as "not to exceed" or "estimated" or "approximately, etc. are acknowledged by Owner as not limiting or specifying total amount that will be due and payable hereunder or total number of hours, etc., that will be required to accomplish the work.
(j) Prices quoted herein are based on the pump being complete and intact and not binding in the hole and without obstructions of any kind causing delays or preventing progress of the repairs contemplated and is based on the pump holding together until removed and or installed and easy and clear access. Should the actual conditions that are encountered be different, then Contractor shall, without prior approval by the Owner, be entitled to make such additional charges for equipment and labor and or materials necessary to accommodate the work to the conditions encountered.
(k) It is understood that it is the duty of the owner to satisfy himself that the necessity for the repairs is not occasioned by other factors such as electrical, etc. and the owner shall be liable to pay for all amounts due hereunder, even if it should ultimately be found that the necessity for repairs was occasioned by or attributable to such other factors.
11. The failure of either party to insist in any one or more instances upon a strict performance of any of the terms or provisions of this contract or to exercise any option or election herein contained, shall not be construed as a waiver or a relinquishment for the future of such terms, provisions, option or election, but the same shall continue and remain in full force and effect and no waiver by either party of any one or more of its rights or remedies under this contract shall be deemed to be a waiver of any prior or subsequent rights or remedy hereunder or at law.
12. It is understood and agreed by the parties hereto that this agreement shall inure to the benefit of and be binding on the respective heirs executors administrators, successors and assigns of parties hereto.
13. Contractor warns Owner against use of chemicals of any kind in care or maintenance of well or its equipment and against use of chlorination or any other substances in treatment of water while in the well or pump, because such care or treatment, without prior knowledge of the details of well's constructions and the workings of well equipment and without knowledge of possible effects which such use may have upon the will and its equipment might result in grave damage to same.