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An indemnity agreement is a valid agreement in Oklahoma, and is governed by statute. Okla. Stat. tit. 15. §§ 421-430.
As a result of a burglary in August, 1984, the Fretwells sued appellant Protection Alarm Company, which installed and maintained a burglary alarm system in the Fretwells' residence. In a negligence action, the Fretwells claimed that the appellant had failed to notify the police department of a cut in their telephone service, which was the line that carried the alarm signal; that they failed to use the house key supplied by the Fretwells to check the residence; and that they failed to call the list provided by the Fretwells of persons to be notified in the event of an alarm. The jury rendered verdict in favor of the Fretwells and awarded them damages in amount of goods stolen. The appellant sought review and argued that the contract between the parties limited its liability.
Was the contractual provision limiting appellant’s liability enforceable?
The Court reversed the district court’s decision, noting that the provisions limiting liability and the amount of damages under burglar alarm service agreements have been upheld in the majority of jurisdictions. According to the Court, the appellant was not an insurer against burglary since the contract explicitly stated appellant was not an insurer and offered to increase monthly payment if insurance was desired. Moreover, the Court held that contractual provision limiting appellant's liability was neither unconscionable nor against public policy. The Court strictly construed provision but ruled that since provision was clearly expressed, it was enforceable. Therefore, the damages to Fretwells were limited to the amount given in the provision.