Mega Corporation,the bailor,negotiates a bailment agreement with Huge Corporation,the bailee.Huge Corporation insists that an exculpatory clause be included in the terms and conditions of the bailment agreement.Later,Huge Corporation negligently (ordinary negligence,not gross negligence)damages the property that is the subject of the bailment.Most courts will allow Huge Corp.to stand behind its exculpatory clause and deny liability.

Question

Quizplus · Accepted Answer

Many courts will enforce exculpatory clauses in bailment agreements as long as they are clear and unambiguous, not against public policy, and do not involve gross negligence or willful/wanton misconduct. In this case, the negligence of Huge Corporation is considered ordinary negligence and therefore, the exculpatory clause may be upheld and they may not be held liable for damages to the property.

Mega Corporation,the Bailor,negotiates a Bailment Agreement with Huge Corporation,the Bailee