## Facts

- Charles Wedner, doing business as Wedner Furs, hired Fidelity Security Systems, Inc. to provide burglar alarm protection for his fur store for an annual fee of $312.
- The contract stated Fidelity would not be liable for loss or damage to the subscriber’s goods and, if any liability arose “whether due to the negligence of [Fidelity] or otherwise,” liability would be limited to the yearly service charge ($312), described in the contract as “liquidated damages.”
- During the contract term, the store was burglarized and Wedner lost $46,180 in furs.
- In a non-jury trial, the court found Fidelity negligently breached the burglary protection contract.
- Despite finding negligence and substantial loss, the trial court enforced the contract clause and limited Wedner’s recovery to $312.
- Wedner appealed, challenging the enforceability of the damages-limitation clause.

## Issues

1. Whether a contract clause capping an alarm company’s liability at the annual service charge is enforceable where the company negligently breached the contract and the subscriber suffered substantial commercial loss.
2. Whether the clause should be analyzed as an unenforceable liquidated-damages/penalty provision or as an enforceable limitation of liability.
3. Whether public policy or unconscionability bars enforcement of the clause in a commercial alarm-service contract.

## Decision

- The Superior Court affirmed the judgment limiting Wedner’s recovery to $312.
- The court treated the provision as a limitation of liability rather than a liquidated-damages clause, notwithstanding the contract’s use of the term “liquidated damages.”
- The court held that parties may contractually limit recoverable damages in non–public-service contexts, subject to unconscionability and public policy constraints.
- The court found no basis to invalidate the clause: the transaction involved commercial loss between experienced business parties, and the service was not treated as an essential public utility triggering heightened policy limits.

## Legal Principles

- A term limiting the amount of damages recoverable for breach is conceptually distinct from liquidated damages or a penalty; the operative effect and intent control over labels used in the contract.
- In ordinary commercial contracts, parties may allocate risk by limiting liability to a specified amount, absent unconscionability or a clear public-policy prohibition.
- Limitation or exclusion of consequential damages in commercial settings is generally enforceable unless unconscionable; stronger scrutiny commonly applies to personal injury or consumer contexts.
- Public-policy restrictions that constrain liability limitations for certain essential public services do not automatically extend to private commercial protective-service contracts.

## Conclusion

The court enforced an alarm-service contract clause capping liability at the annual service fee, holding that the provision functioned as a permissible limitation of liability in a commercial setting and was not invalidated by the subscriber’s large loss, the provider’s negligence, unconscionability, or public-policy concerns.


Wedner v. Fidelity Sec. Sys., Inc., 307 A.2d 429 (Pa. Super. Ct. 1973)