Business and Construction Law
An exculpatory clause relieves a party from liability. Courts have a tendency to give effect to contractual exculpatory clauses, in contracts that do not involve public interest. The following paragraphs will review two similar cases. One involves only private interest and the second one affects the public interest. First there will be a small summary of the cases and after that a brief comparison.
Gregg v Ministor Ventures (1983). Gregg leased storage space from Ministor Ventures and was given the opportunity to purchase insurance at $2.00 per month per thousand dollars of coverage. Gregg declined the insurance, after this the property was stolen. The exculpatory clause in the contract indicated that the costumer would have to put with theft loses. The court held that when there is no public interest in the contract, the law allows a party, for a consideration, to bear a risk that the law would otherwise have placed on the other party.
This case involves a contractor that agreed to perform ship maintenance for the US Navy. The contractor had to sign a user’s agreement with the port district. The agreement incorporated a dry dock tariff that contained a clause exculpating the district from any loss arising from disruption, delay or negligence. The agreement included the use of a crane which was not in operating condition. So the contractor rented cranes as substitutes. The contractor sued the port. The magistrate entered judgment in favor of the contractor. Then the Ninth Circuit Court reversed the judgment. The argument was that California has upheld exculpatory provisions as long as they do not affect public interest.
These cases, in away had the same issue. Someone had a financial loss of some kind. In the first case the judge made the owner help the person who lost some property. In the second case, since the owner was a public agency, the party that suffered the loss had to pay for all the damages....