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.
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.
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.
and no statute expressly prohibits it”), citing 1 Witkin, Summary of Cal. In placing particular contracts within or without the category of those affected with a public interest, the courts have revealed a rough outline of that type of transaction in which exculpatory provisions will be held invalid.
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.
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.
Thus the attempted but invalid exemption involves a transaction which exhibits some or all of the following characteristics.
It concerns a business of a type generally thought suitable for public regulation.