Signing a contract without carefully reviewing its terms is like walking into a minefield blindfolded—you won’t realize the danger until it’s too late. What happens if a contract holds you responsible for things completely out of your control, like a fire or a natural disaster?
That’s exactly what happened in Trustees of Conneaut Lake Park, Inc. v. Park Restoration, LLC (2017). Park Restoration signed a contract to manage a venue, and their agreement stated that if the contract ended, they had to return the property “in broom clean condition and without any damage.”
Then, disaster struck—a fire burned the building to the ground. Park Restoration assumed they’d be excused from their obligation because, well, the building no longer existed. But the court ruled otherwise.
Why? Because the contract’s wording was clear—Park Restoration had agreed to return the property in good condition, no matter what. By signing the contract without limiting their liability, they unknowingly accepted full responsibility, even for events they couldn’t control.
The Takeaway? If you don’t negotiate your contract terms, you could be on the hook for more than you expect.
How to Protect Yourself in Contract Negotiations
Contracts come with default legal protections, such as the doctrine of impossibility, which excuses performance if it becomes truly impossible. However, these protections disappear if the contract assigns the risk to you. That’s why negotiating the right language upfront is critical.
Here’s how to avoid unlimited liability in your contracts:
- Limit Your Responsibility to Damage You Actually Cause. If a fire, natural disaster, or third-party act destroys the property, you shouldn’t be on the hook.
- Include a Force Majeure Clause. Protect yourself from unforeseen circumstances like extreme weather, war, or government shutdowns.
- Clarify the Scope of Your Obligations. If you’re required to return something in good condition, add exceptions for events that make it impossible.
A Smarter Contract Clause (Use This Instead)
Rather than leaving yourself exposed, negotiate a clear limitation of liability like this:
“In the event of termination for any reason, [Party] warrants and represents that it will vacate the premises in broom clean condition and without any damage, except for damage caused by fire, natural disasters, acts of God, acts of third parties beyond [Party]’s control, or any other unforeseen events not arising from [Party]’s negligence, willful misconduct, or failure to take reasonable precautions. In the event of such unforeseen circumstances, [Party] shall not be held liable for conditions beyond its control but shall make reasonable efforts to mitigate any resulting damage where feasible.”
Why This Works:
- Prevents you from being held responsible for disasters beyond your control.
- Ensures you’re only liable for damage you actually cause.
- Creates a fairer, more balanced contract that reduces unnecessary risk.
Read Before You Sign
Contracts aren’t just about what you expect to happen—they’re about protecting yourself when the unexpected happens. If your agreement doesn’t clearly limit your liability, you could end up being legally responsible for things you never agreed to.
Disclaimer: This article is for informational and educational purposes only and does not constitute legal advice. Every contract situation is unique, and you should consult with a qualified attorney before making any legal decisions or signing agreements.