Same - Exemption From Liability For Negligence

173. As a general rule, a party may make a valid contract for exemption from liability for his own negligence or that of his servants.

174. EXCEPTIONS:

(a) A stipulation, in a contract between master and servant, that the master shall not be liable for injuries to the servant caused by the negligence of the master, or by the negligence of superior servants for which the law makes the master liable, is contrary to public policy.

(b) The same is true of a stipulation in a contract with a common carrier, either of goods or passengers, exempting it from liability for losses or injuries caused by its negligence. (c) The same is true, in some jurisdictions, of a stipulation by a telegraph company exempting it from liability for error, delay, or nondelivery; but as to this there is a direct conflict of opinion.

64 Hilton v. Eckersley. 6 El. & Bl. 47, 66. See "Contracts," Deo. Dig. (Key-No.) § 116; Cent. Dig. §§ 51,2-552.

65 Cote v. Murphy, 159 Pa. 420, 28 Atl. 190, 23 L. R. A. 135, 39 Am. St. Rep 686. "The moment the legislature relieves one," said the court, "and by far the larger number, of the citizens of the commonwealth from the common law prohibitions against combinations to raise the price of labor, down went the foundation on which common-law conspiracy was based as to that particular subject" See "Contracts," Dec. Dig. (Key-No.) § 11G; Cent. Dig. §| 642-552.

66 Goldfleld Consol. Mines Co. v. Goldfield Miners' Union No. 220 (C. C.) 159 Fed. 500. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 542 652.

67 Jacobs v. Cohen, 183 N. T. 207, 76 N. E. 5, 2 L. R. A. (N. S.) 292, I11 Am. St. Rep. 730, 5 Ann. Cas. 280 [reversing 99 App. Div. 481, 90 N. Y. Supp 854]; Kissam v. United States Printing Co. of Ohio, 199 N. Y. 76, 92 N. E. 214 [affirming judgments 128 App. Div. 889, 112 N. Y. Supp. 1134, 1137]. See "Contracts," Dec. Dig. (Key-No.) § 116; Cent. Dig. §§ 51,2-552.

Clark Cont.(3d Ed.) - 26

In accordance with the general policy of the law, which favors the freedom of contract, a person may, except in certain cases, make a valid contract for exemption from liability for the negligence of himself or that of his servants.63 Illustrations of such contracts are fire insurance policies, which protect the insured against losses by fire occasioned by his negligence, policies of liability insurance, which protect the insured against liability for personal injuries caused by the negligence of himself or his servants, and contracts by a railroad company with persons allowed by it to build on its right of way for exemption from liability for injury to such structures by fire due to the negligent operation of the company's locomotives.69

A party may not, however, by contract exempt himself from liability for his negligence in the performance of certain absolute duties imposed by law. Thus a master owes certain duties to his servants, and a common carrier to passengers and shippers of goods, which duties are imposed by law in the interest of the public, and against liability for the breach of which he may not contract.70

According to the better opinion, a master cannot, by stipulation in the contract with his servant, exempt himself from liability for injuries to the servant caused by his negligence. Such a stipulation is void as being contrary to public policy.71 It has also been held that, since the liability imposed upon a railroad company by law for injuries to their servants caused by the carelessness of those who are superior in authority and control over them, is based upon considerations of public policy, for this reason a railroad company cannot stipulate with its employes, at the time and as a part of their contract of employment, that such liability shall not attach to it. "Such liability is not created for the protection of the employe simply, but has its reason and foundation in a public necessity and policy, which should not be asked to yield or surrender to mere private interests and agreements." 72

68 JAMES QUIRK MILLING CO. v. MINNEAPOLIS & ST. L. R. CO., 98 Minn. 22, 107 N. W. 742, 116 Am. St. Rep. 336, Throckmorton Cas. Contracts, 286. See "Railroads," Dec. Dig. (Key-No.) § 469; Cent. Diy. § 1665.

69 JAMES QUIRK MILLING CO. v. MINNEAPOLIS & ST. L R. CO., supra. See "Railroads," Dec. Dig. (Key-No.) § 469; Cent. Dig. § 1665.

70 JAMES QUIRK MILLING CO. v. MINNEAPOLIS & ST. L R. CO., supra. See "Carriers," Dec. Dig. (Key-No.) § 147; Cent. Dig. §§ 637-648; "Master and Servant," Dec. Dig. (Key-No.) § 100; Cent. Dig. §§ 166-170.

71 Runt v. Herring, 2 Misc. Rep. 105, 21 N. Y. Supp. 244, and cases there cited; Louisville & N. R. Co. v. Orr, 91 Ala. 548, 8 South. 360; RICHMOND & D. R. CO. v. JONES, 92 Ala. 218, 9 South. 276, Throckmorton Cas. Contracts, 337; Roesner v. Hermann (C. C.) 8 Fed. 7S2. See Purdy v. Railroad Co., 125 N. Y. 209, 26 N. E. 255, 21 Am. St. Rep. 736. Where an employe joins a relief association to which he contributes, and his employer guaranties the obligations, etc., the employe's agreement in his application for membership that acceptance of benefits from the association for an injury shall release the company from damages is not void as against public policy, since he has the right of election to accept benefits or sue. Otis v. Pennsylvania Co. (C. C.)

A railroad company, shipowner, or other common carrier cannot, by stipulation in contracts of carriage, exempt itself from liability, or limit its liability, for injury to passengers or goods caused by its own negligence or the negligence of its servants. Such a stipulation is, in this country at least, regarded as contrary to public policy.73 It may, however, exempt itself from losses or injuries occurring from other causes than its own negligence, as from accident, and for which it would be liable as an insurer. 74