Samson Sales, Inc. v. Honeywell, Inc.

Samson Sales (plaintiff) hired Honeywell (defendant) to install and monitor a $1,500 store alarm system for $150 per month over five years, under a contract capping Honeywell's liability at $50 if the system failed. When Samson's store was burglarized and the alarm never sounded, Samson lost about $68,000 in merchandise and sued for that amount. The trial court limited recovery to the $50 contractual cap, but the court of appeal reversed, finding the cap an invalid penalty, and Honeywell appealed.