California’s Public
Policy Limitation on
Exculpatory Releases
by Karen A. Henry
“Drafters of releases always face the
problem of steering between the
Scylla of simplicity and the Charybdis
of completeness, … only on
draftsman’s Olympus is it feasible to
combine the elegance of a trust
indenture with the brevity of a stop
sign.” Nat’l & Int’l Brotherhood of
Street Racers, Inc. v. Superior Court,
215 Cal. App. 3d 934, 938-939
(1989).
Three Prerequisites to Enforcement:
To be enforceable, a release must exhibit the
following three characteristics:
1. It must be clear, unambiguous and explicit in expressing
the intent of the parties;
2. The injury-causing act must be reasonably related to the
object or purpose for which the release is given; and
3. The release cannot contravene public policy.
See Madison v. Superior Court, 203 Cal. App. 3d 589, 598
(1998).
California Civil Code § 1668
 “All contracts which have for their object,
directly or indirectly, to exempt anyone 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.”
Against the policy of
the law?
What does that mean?
An exculpatory provision is “against
the policy of the law” if:
 It violates the express language of Section 1668;
or
 It “involves the public interest.”
Violates the express language of
Section 1668:
 Section 1668 specifically proscribes contracts
that purport to release anyone from liability for
fraud, willful injury to the person or property of
another, or a violation of law.
 The following claims thus fall within the statute’s
express language:
Claims That Cannot Be Released:
 Fraud;
 Negligent Misrepresentation;
 Violation of law;
 Negligence Per Se (arising from an alleged
statutory violation);
 Any intentional tort; and
 Gross negligence (maybe; stay tuned…).
What’s not on the list?
 Section 1668 does not proscribe a contract that
releases a person/entity from liability for
ordinary negligence, provided the transaction
does not “involve the public interest.”
“Involves Public
Interest?”
What does this mean?
How do you determine whether an exculpatory provision “involves
the public interest?”
 Examine the Nature of the Transaction: To
determine whether an agreement releasing liability
for ordinary negligence is enforceable, courts are
directed to examine “the overall transaction – with
special emphasis upon the importance of the
underlying service or program, and the relative
bargaining relationship of the parties.” City of Santa
Barbara v. Superior Court, 41 Cal. 4th 747, 762
(2007).
Tunkl v. The Regents of the Univ. of
Calif., 60 Cal. 2d 92 (1963).
 Facts:
 Plaintiff brought action to recover damages for
personal injuries that he allegedly suffered as a result
of the negligence of two physicians employed by the
University of California Los Angeles Medical Center;
 The plaintiff had been admitted to the hospital as a
patient, and, upon his entry, he signed a document
setting for certain “Conditions of Admission”;
Condition #6
 “Release: The hospital is a nonprofit, charitable institution. In
consideration of the hospital and allied services to be rendered
and the rates charged therefor, the patient or his legal
representative agrees to and hereby releases The Regents of
the University of California, and the hospital from any and all
liability for the negligent or wrongful acts or omissions of its
employees, if the hospital has used due care in selecting its
employees.”
 Plaintiff stipulated that the hospital had selected its employees
with due care.
 The jury returned a verdict sustaining the validity of the release,
and judgment was entered in favor of the Regents.
Court first examined how lower appellate
courts had interpreted Section 1668.
 “The course of section 1668 … has been a
troubled one.” Id. at 95.
 Some cases had interpreted the statute strictly;
 One case limited the phrase “negligent violation of
laws” exclusively to violations of statutory law;
 Other cases had held that the statute prohibits the
exculpation of gross negligence only;
 Another case held that the statute forbids exemption
from active as contrasted with passive negligence.
Despite diverse interpretations, decisions were
uniform in one respect:
 Cases uniformly held that “[an] exculpatory
provision may stand only if it does not involve
“the public interest.” Id. at 96.
What is “the public interest” in this
context?
 “No definition of the concept of public interest
can be contained within the four corners of a
formula. The concept, always the subject of
great debate, has ranged over the whole course
of the common law; rather than attempt to
prescribe its nature, we can only designate the
situations in which it has been applied.” Id. at
98.
Transactions “Stamp[ed]” As Involving
“the Public Interest”:
 The Court identified the following six
transactions as characteristic of the types of
transactions in which exculpatory provisions will
be held invalid (“the Tunkl factors”):
First Tunkl Factor:
 The transaction “concerns a business of a type
generally thought suitable for public regulation.”
Second Tunkl Factor:
 “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.”
Third Tunkl Factor:
 “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.”
Fourth Tunkl Factor:
 “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.”
Fifth Tunkl Factor:
 “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.”
Sixth (and final) Tunkl Factor:
 “[A]s 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.”
But these are voluntary transactions!
“While obviously no public policy opposes private,
voluntary transactions in which one party, for a
consideration, agrees to should a risk which the law
would otherwise have placed upon the other party,
the above circumstances pose a different situation.
In this situation, the releasing party does not really
acquiesce voluntarily in the contractual shifting of
the risk, nor can we be reasonably certain that he
receives an adequate consideration for the transfer.
Since the service is one which each member of the
public, presently or potentially, may find essential to
him, he faces, despite his economic inability to do
so, the prospect of a compulsory assumption of the
risk of another’s negligence.”
Must all of the Tunkl factors be
present:
 Unclear; but probably not.
 Tunkl court said that “the agreement need only fulfill
some of the characteristics” to “involve the public
interest” and, thus, be unenforceable.
 Subsequent cases have not adhered to this dicta.
In Kurashige v. Indian Dunes, Inc., 200 Cal.
App. 3d 606 (1988), in evaluating a release
signed by a motorcycle dirt-bike rider, the
court cited all six Tunkl factors but discussed
only four of them. The court found that
defendants' dirt bike business "did not
involve the public interest: defendants'
business was not generally thought to be
suitable for public regulation; defendants did
not perform a service of great importance to
the public, and the business was not a matter
of practical necessity for members of the
public; and defendants' customers did not
place their persons under defendants'
control." 200 Cal. App. 3d at 612.
In Madison v. Superior Court, 203
Cal. App. 3d 589, 599 (1988) the
court also cited all six Tunkl
factors, and then broadly declared
that "[t]his case involves no more
a question of public interest than
does motorcross racing, sky
diving, or motorcycle dirt-bike
riding.“ (Internal citations
omitted).
Similarly, in Hulsey v. Elsinore Parachute Center, 168 Cal.
App. 3d 333, the court identified all six Tunkl factors and then
discussed some of them: "Applying the Tunkl factors to the
facts here, several distinctions are readily apparent. First,
parachute jumping is not subject to the same level of public
regulation as is the delivery of medical and hospital services.
Second, the Tunkl agreement was executed in connection
with services of great importance to the public and of
practical necessity to anyone suffering from a physical
infirmity or illness. Parachute jumping, on the other hand, is
not an activity of great importance to the public and is a
matter of necessity to no one. Finally, because of the
essential nature of medical treatment, the consuming party in
Tunkl had little or no choice but to accept the terms offered
by the hospital. Defendant had no decisive advantage in
bargaining power over plaintiff by virtue of any ‘essential
services’ offered by defendant." 168 Cal. App. 3d at 342-343.
What have we learned so far?
 Individuals/entities cannot exculpate themselves
from fraud, negligence per se, statutory
violations, or any intentional torts; but
 Individuals/entities can exculpate themselves
from ordinary negligence, if the transaction
does not “involve the public interest.”
What about gross negligence?
City of Santa Barbara v. Superior Court,
41 Cal. 4th 747 (2007).
 The mother of a developmentally disabled 14-year-
old girl signed an application form releasing the City
of Santa Barbara and its employees from liability for
“any negligent act” related to her daughter’s
participation in the City’s summer camp for
developmentally disabled children. Her daughter
drowned while attending the camp, and she brought
a wrongful death action against the City alleging that
the accident was caused by the City’s negligence.
The City alleged that the release barred
the claim, and moved for summary
judgment, which the trial court denied.
The City then filed a petition for writ of
mandate, which was denied by the Court
of Appeal, which concluded that, although
the agreement was effective and
enforceable relative to the City’s liability
for future ordinary negligence, it was
ineffective to release the City from liability
for gross negligence.
California Supreme Court Held:
 “[A]n agreement purporting to release liability for
future gross negligence committed against a
developmentally disabled child who participates
in a recreational camp designed for the needs of
such children violates public policy and is
unenforceable.”
Does City of Santa Barbara make unenforceable any
exculpation of gross negligence?
 Probably:
 The California Supreme Court’s holding in City of
Santa Barbara was very narrow;
 But the Court did broadly announce the rule that
“public policy generally precludes enforcement of
an agreement that would remove an obligation to
adhere to even a minimal standard of care.” 41
Cal. 4th at 777 (emphasis in original);
 At least one reported case reads City of Santa
Barbara as holding that “a release exculpating a
city from liability for ‘any negligent act’ did not
extend to acts of gross negligence”). Booth v.
Santa Barbara Biplanes, Inc., 158 Cal. App. 4th
1173 (2008) (simple negligence case).
Is exculpation of gross negligence against public policy
per se, or should courts still apply the Tunkl factors?
 In City of Santa Barbara the Court did not apply Tunkl’s
“transaction-focused” analysis, but instead employed the
public policy rationale of out-of-state decisions that
focuses on “the degree or extent of the misconduct at
issue, in order to discourage (or at least not facilitate)
aggravated wrongs.”
 Since the Court did not apply the Tunkl factors in reaching
its holding in City of Santa Barbara, it does not appear
that the Tunkl factors are relevant to the analysis.
 Thus, like fraud, claims for gross negligence probably are
not releasable in California, irrespective of whether the
transaction “involved the public interest.”
Disclaimers
 To provide some protection from fraud and negligent
misrepresentation claims, some producers include
language in the releases whereby the show participant
expressly acknowledges that no representations have
been made to them other than those expressly set forth in
the release.
 A disclaimer of this type might establish that the show
participant’s reliance on the alleged misrepresentations
was not justifiable.
Can an ordinary integration clause
serve this purpose?
 “A party to a contract who has been guilty of fraud in its
inducement cannot absolve himself from the effects of his
fraud by any stipulation in the contract, either that no
representations have been made, or that any right which
might be grounded upon them is waived. Such a
stipulation or waiver will be ignored, and parol evidence of
misrepresentations will be admitted, for the reason that
fraud renders the whole agreement voidable, including
the waiver provision.” Greenspan Volkswagen v. Ford
Motor, 32 Cal. App. 4th 985, 994 n.7 (1995) citing 1
Witkin, Summary of Cal. Law, Contracts, § 410, pp. 368369.
Hinesley v. Oakshade Town Center,
135 Cal. App. 4th 289, 301 (2005).
 An integration clause may weigh against
justifiable reliance when the clause in question is
narrowly tailored to gauge against the
particular misrepresentations at issue in the
case.
In Hinesley, the plaintiff had signed a lease with
a shopping mall developer after the developer
made certain representations about the mall’s
future tenants. When those tenants did not
lease space at the mall, the plaintiff sued the
developer for rescission and fraudulent
concealment, claiming that it never would have
signed the lease but for the developer’s
misrepresentations about the other anticipated
tenants. The court refused to invalidate the
agreement, however, because it included terms
by which the plaintiff specifically disclaimed any
reliance on statements about the identity of
those tenants.
Hinesley Disclaimer
 “Lessee does not rely on the fact nor does
Lessor represent that any specific Lessee o[r]
type or number of Lessees shall during the term
of this Lease occupy any space in the Shopping
Center.”