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App.4th at 234 (“It is now settled—and in full accord with the language of the [Cal. Code § 1668] — that notwithstanding its different treatment of ordinary negligence, under section 1668, ‘a party [cannot] contract away liability for his fraudulent or intentional acts or for his negligent violations of statutory law,’ regardless of whether the public interest is affected”). App.4th 224, 243 (2003) (“The present view is that a contract exempting from liability for ordinary negligence is valid where no public interest is involved ... 569; , 60 Cal.2d 92, 96 (1963) (finding that a contract between a hospital and an entering patient affects the public interest, the supreme court thereupon invalidated a clause in a hospital admission form that released the hospital from liability for any negligence of its employees) (“obviously no public policy opposes private, voluntary transactions in which one party, for a consideration, agrees to shoulder a risk which the law would otherwise have placed upon the other party”).
It concerns a business of a type generally thought suitable for public regulation.In commercial contracts, California permits the use of exculpatory clauses and limitations of liability with some exceptions.A limitation of liability clause permits contracting parties to reduce or eliminate the potential for direct, consequential, special, incidental and indirect damages for breaches of or claims under the contract.An exculpatory clause is a provision that relieves one party of liability altogether for the specified damages.Below is a summary of the law in California with respect to some common subjects of exculpatory clauses and limitations of liability.§ 1668 (“All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law”); , 113 Cal.Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents. California does not recognize any cause of action for “gross negligence” unless such an action is directly, or at least implicitly, authorized by one of the numerous statutes that employ gross negligence as the applicable standard. App.3d 322, 328-30 (1987) (“we conclude that no defensible reason exists for categorizing wilful [sic] and wanton misconduct as a different kind of negligence not suitable for comparison with any other kind of negligence . The procedural element focuses on two factors: "oppression" and "surprise." Oppression" arises from an inequality of bargaining power which results in no real negotiation and "an absence of meaningful choice." "Surprise" involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the party seeking to enforce the disputed terms.
Characteristically, the form contract is drafted by the party with the superior bargaining position.
Of course the mere fact that a contract term is not read or understood by the nondrafting party or that the drafting party occupies a superior bargaining position will not authorize a court to refuse to enforce the contract.
The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public.
The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. we have not found any case addressing a limitation on liability for intentional wrongs, gross negligence or violations of the law”) (emphasis in original).
As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. 4th 69, 77 (1997) (permitting a contractual limitation on the liability of directors for defamation arising out of their roles as directors where the injured party retains his right to seek redress from the corporation) (“Although exemptions from liability for intentional wrongs, gross negligence and violations of the law have been consistently invalidated . 1670.5(a) provides that “[i]f the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.” Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.
In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. any attempt to categorize gross negligence separately from ordinary negligence is unnecessary”). App.4th 1715, 1741-47 (1993) (“We conclude that, as a matter of public policy, product suppliers cannot insulate themselves from strict liability in tort for injuries caused by defects in products they place on the market by obtaining a consumer's signature on an express assumption of risk”). Phrased another way, unconscionability has both a ‘procedural’ and a ‘substantive’ element.