Court Opinion

ID: 9742363
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:11:47.318704+00
Date Added: 2024-06-11T07:24:31.647038
License: Public Domain

Mr. JUSTICE HEIPLE, dissenting: Reuben H. Donnelley Corp., as publisher of the telephone directory, solicited listings from McClure Engineering Corp., a professional engineering firm.- McClure bought the space and paid the contract price of $271.20. The contract offered by Donnelley contained an exculpatory clause which referred to Donnelley as the “Telephone Company” and limited its liability to a refund of the publication charges in the event of any error, omission, or failure to publish. Donnelley then failed to publish the listing contracted for, and McClure sued for consequential damages for lost business, claiming that the exculpatory clause was a violation of public policy. At trial, at the close of the plaintiff’s case, the trial court granted defendant’s motion for directed verdict, and entered a judgment in favor of plaintiff for $271.20 representing the price paid for the advertising without regard to consequential damages. Plaintiff appeals, and this court has chosen to affirm. I disagree. In this situation, the telephone company and the publisher of the telephone book are, for all practical purposes, one. The service offered is a protected monopoly service. There is no competing telephone company, and there is no competing telephone directory. Today’s business climate depends on the telephone. Consumers of services are urged through repetitive advertising to use the yellow pages and “Let your fingers do the walking.” This court could and should take judicial notice of the business necessity for professional corporations such as McClure Engineering to have a telephone and to carry advertising in the yellow pages. Given this recognition, there is no equality of bargaining position. It is like the story of the chicken and the pig who were asked to donate ham and eggs for a dinner. While the cost of the donation was a minor matter to the chicken, it was a matter of life and death to the pig. So it is with Donnelley and McClure. Donnelley can well afford to lose $271.20 that it is not entitled to for not running McClure’s listing. But McClure Engineering cannot afford to lose the lost business occasioned by the dropped listing in the yellow pages. Numerous treatises and articles have discussed contractual clauses which limit liability. Some are upheld. Some are not. In determining the validity of such clauses, it is important to consider whether one of the parties is charged with a public service. It is also important to consider whether there is equality of disparity of bargaining power. Furthermore, the extent of the limitation and its reasonableness should also be considered. In the case at hand, defendant is performing a public monopoly service. There is a complete disparity of bargaining power. The exculpatory clause totally and absolutely bars any liability on the part of the defendant. To merely be obligated to refund the precollected contract price is to be liable for nothing. Under the clause in question, defendant cannot be held to pay even 10 cents for error, omission, or failure to publish. All they have to do is refund the amount paid. Thus, they merely obligate themselves to return what was not theirs anyway. Clauses designed to protect contracting parties from the consequences of their negligence should be carefully scrutinized. I believe that the instant clause should be held void as against public policy. Accordingly, I dissent.