Tunkl v. Regents of University of California

Supreme Court of California · 1963 · Contracts

Contractsexculpatory clausepublic policyhospitalsix-factor testCivil Code section 1668exculpationrelease

Facts

Tunkl was admitted to the University of California Los Angeles Medical Center, a nonprofit charitable research hospital operated by the Regents. Upon admission, he signed a "Conditions of Admission" form containing a clause releasing the Regents and the hospital from liability for negligent or wrongful acts or omissions of employees if the hospital had used due care in selecting them. Plaintiff stipulated that the hospital had selected its employees with due care. On appeal, the only question was whether that release was valid as a matter of law.

Issue

May a charitable research hospital require, as a condition of admission, that a patient release the hospital from liability for future negligence of its employees? More broadly, is such an exculpatory clause invalid under Civil Code section 1668 because the hospital-patient contract affects the public interest?

Rule

An exculpatory clause releasing liability for future negligence is invalid under Civil Code section 1668 when the transaction affects the public interest. A transaction exhibits that character when it involves some or all of these features: it concerns a business generally thought suitable for public regulation; the party seeking exculpation performs a service of great importance to the public, often a practical necessity; the party holds itself out as willing to perform the service for members of the public meeting established standards; because of the service's essential nature and the economic setting, the party has decisive bargaining advantage; the party uses a standardized adhesion contract and offers no option to pay additional reasonable fees for protection against negligence; and the purchaser's person or property is placed under the seller's control, subject to the risk of the seller's carelessness.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Sacramento, Valley Heart Institute is a nonprofit cardiac hospital specializing in complex procedures. Every admitted patient must sign a preprinted form releasing the hospital from liability for future negligence by hospital staff, and the hospital offers no alternative admission terms for any additional charge.

If a patient is later injured by the negligent conduct of a hospital employee, is the release most likely enforceable?

Explanation. The majority held that an exculpatory clause releasing a hospital from future negligence is invalid when imposed as part of a hospital-patient agreement affecting the public interest. Hospitals are suitable for regulation, provide services of great public importance and practical necessity, use standardized admission forms, possess superior bargaining strength, and place the patient under their control. The court rejected the idea that nonprofit status or careful hiring saves the clause.