The issue of whether you can disclaim/exculpate youself from liability by contract depends on the law of the state whose law governs the contract. In Connecticut you can not disclaim/exculpate yourself from liability by contract, but you can limit your liability to a reasobable amount. Both parties to the contract have to agree to it, and the contract must be performed by both parties in accord with the agreement. In the above case it sounds as though there was no express contract limiting liability. It appears that the vendor merely announced the limitation, and the title company came back with differeing terms of limitation and the amount of isurance coverage required of the vendor. In effect the title company did not agree to the limitation proposed by the vendor, but rather made a counter offer. It is open to question whether the vendor in accepting the work from the title company accepted the terms of the title company in some possible contract implied in fact or whether the vendor's repeated announcements of his limitation of liabilty represented a series of counter offers. In short, if your state law permits limitation of liability, it is best to have it clearly identified in an express written contract. I recently drafted several contracts in which the insurance carrier insisted on a clause limiting liabilty for the insured. In the absence of an express contract the party seeking limitation is reduced to the argument of asserting that there was a contract implied in fact. In which case the court is left with nothing but examining the conduct of the parties in their business relationship to determine the intent of the parties, and the party asserting that he was protected by the contract implied in fact is left with the burden of proof at trial. Some other states do permit disclaiming/exculpating yourself from liabilty by contract, and in this case it also best to have that term of the contract clearly identified in an express written contract. As a practcal matter though it is questionable whether the title companies will do business with you if you either limit or dsclaim/exculpate yourself from liability, and adequate insurance coverage remains the best protection both for yourself and the future financial well being of your business.

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