From:	Sullivan, JAttorneys for Appellant

John H.	To:	Shepard, C.J. __________

	Dickson, J.     __________

	Selby, J.         __________

	Boehm, J.       __________

Date:	August 24, 1996		Administrator

Attorneys for Appellant

John H. Shean

Shean Law Offices

Bloomington, Indiana			

Attorneys for Appellee

Andrew W. Hull

Alice McKenzie Morical

Johnson Smith Pence Densborn Wright & Heath

Indianapolis, Indiana

	IN THE

	INDIANA SUPREME COURT

GARY TRIMBLE,

	doing business as

BLOOMINGTON AUTO PARTS,

	Appellant (Plaintiff below)

	v.

AMERITECH PUBLISHING, INC.,

	Appellee (Defendant below).

)

)	Supreme Court No.

)	53S01-9805-CV-298

)

)	Court of Appeals No.

)	53A01-9707-CV-215

)

)

)

)

	APPEAL FROM THE MONROE CIRCUIT COURT

	The Honorable Elizabeth M. Mann, Judge

	Cause No. 53C04-9607-CP-919

	ON PETITION TO TRANSFER

	[Hand down date]October 9, 1998

SULLIVAN,  Justice.

	In this case, a business owner wanted to advertise in Ameritech’s “Yellow Pages.” 

Ameritech agreed but failed to run the ad.  At issue is whether the clause in their contract

limiting Ameritech’s liability to the purchase price of the ad is valid and enforceable.  Court of Appeals’ decisions differ on this issue and we granted transfer to resolve the conflict.

	Background

	On August 24, 1994, an Ameritech advertising sales representative met with Gary

Trimble to execute a written Advertising Order for Trimble’s business advertisement in the

1994-95 PAGESPLUS Directory.  Ameritech failed to publish Trimble’s advertisement. 

Consequently, Trimble filed a complaint seeking damages for loss of business resulting from

the wrongful omission of the advertisement.

	The advertising contract signed by Trimble unequivocally provided that any damages

resulting from Ameritech’s failure to publish the advertisement would be limited to the

amount paid for the advertising or the contract price, whichever is the lesser.

The contract contained the following exculpatory clause:

	Publisher’s liability: . . . if publisher should be found liable for loss or damage due to a failure on the part of the publisher or its directory, in any

respect, regardless of whether customer’s claim is based on contract, tort,

strict liability or otherwise, the liability shall be limited to an amount equal to

the contract price for the disputed advertisements, or that sum of money

actually paid by the customer toward the disputed advertisements, whichever

sum shall be less, as liquidated damages and not as a penalty, and this liability

shall be exclusive.  In no event shall publisher be liable for any loss of cus

tomer’s business, revenues, profits, the cost to the customer of other advertise ments or any other special, incidental, consequential or punitive damages of

any nature, or for any claim against the customer by a third party. . .

	At the time the lawsuit was filed, Trimble had not been charged nor had he paid any

money for the advertisement which was allegedly wrongfully omitted.  The trial court

granted summary judgment for Ameritech.  The Court of Appeals reversed the trial court’s

decision to grant summary judgment and this appeal ensued.

	The circumstances of this case are not unique.  The Court of Appeals has addressed

the failure of Ameritech to publish its customers’ “Yellow Page” advertisements on at least

two other occasions.  In Pigman v. Ameritech PublishingPubl’g, Inc., 641 N.E.2d 1026, 1035 (Ind. Ct. App. 1994), when an attorney brought an action against the yellow pages telephone direc

tory publisher for failing to publish an advertisement, the Court of Appeals held “that the

exculpatory clause contained in [Ameritech’s] Yellow Pages advertising contract is uncon

scionable and void as against public policy as a matter of law.”  One month later, in Pinna cle Computer Servs., Inc. v. Ameritech PublishingPubl’g, Inc., 642 N.E.2d 1011, 1019 (Ind. Ct. App. 1994), when a business owner brought suit against Ameritech’s Yellow Pages for reasons

similar to that in Pigman,1 the Court of Appeals (acknowledging the decision reached in Pigman) decided to follow the majority of other jurisdictions and held that “the exculpatory clause in Ameritech’s Yellow Pages order is valid and enforceable.”2

	Discussion

	The sole issue in this case is whether the State of Indiana will enforce in contracts of

the nature at issue here exculpatory clauses that limit liability to an amount equal to the

lesser of the contract price or the sum of money actually paid to further the contract.  We

hold that such clauses are enforceable.  

	Courts in Indiana have long recognized the freedom of parties to enter into contracts

and have presumed that contracts represent the freely bargained agreement of the parties.  Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126, 1129 (Ind. 1995) (citing Weaver v. American Oil Co., 257 Ind. 458, 463, 276 N.E.2d 144, 147 (1971)).  See Continental Basketball AssociationAss’n, Inc. v. Ellenstein EnterprisesEnters., Inc., 669 N.E.2d 134,139134, 139 (Ind. 1996).  We continue to believe that “it is in the best interest of the public not to restrict unnecessarily persons’ freedom of

contract.”  Fresh Cut, Inc., 650 N.E.2d at 1129 cit(citations omitted).  “Despite this very strong presumption of enforceability, courts have refused to enforce private agreements that contravene statute, clearly tend to injure the public in some way, or are otherwise contrary

to the declared public policy of Indiana.”  Id. at 1130.  See Continental Basketball Associa tionAss’n, Inc., 669 N.E.2d at 139.  

	Trimble does not suggest that the contract contravenes a statute or that the contract

tends to injure the public.  Rather, Trimble contends that the contract is against public

policy.  In determining whether a contract not prohibited by statute nor which tends to injure

the public contravenes public policy, we look at five factors:  (1)  the nature of the subject

matter of the contract; (2)  the strength of the public policy underlying any relevant statute;

(3)  the likelihood that refusal to enforce the bargain or term will further any such policy; (4) 

how serious or deserved would be the forfeiture suffered by the party attempting to enforce

the bargain; and (5)  the parties’ relative bargaining power and freedom to contract.  Fresh Cut, Inc., 650 N.E.2d at 1130 (internal citations omitted).

	The second and third factors are not applicable to this dispute.  As to the other three

factors, we hold that the reasoning of the Court of Appeals in Pinnacle Computer Servs. correctly resolves these considerations in favor of enforceability of the contract.  We

disapprove the decision in Pigman3 and approve and adopt Pinnacle Comp. Servs.  

	Conclusion

	Having granted transfer, we now affirm the trial court’s decision to grant summary

judgment in favor of Ameritech.

	SHEPHARD, C.J., and SELBY,  and BOEHM, J.J., concur.  DICKSON, J., dissents

without opinion.