Thursday, December 26, 2013

Weaver v. American Oil Co. case brief

Weaver v. American Oil Co. case brief summary
276 N.E.2d 144 (1971)

Appellant gas station lessee sought review of a judgment of the Appellate Court (Indiana) that found a lease's exculpatory clause invalid and the lease's indemnifying clause valid. In a declaratory judgment action filed by appellees, an oil company and its employee, the trial court determined that the lessee was liable for injuries sustained on the premises under the provisions of the lease contract.

The oil company's employee sprayed gasoline over the gas station lessee and his assistant, causing them to be burned and injured on the leased premises. The lease with the oil company contained a "hold harmless" clause exculpating the oil company from liability for its negligence, and further compelling the lessee to indemnify the oil company for any damages or loss incurred as a result of its negligence. The trial court found the gas station lessee liable under the terms of the lease; the appellate court held that the exculpatory clause was invalid and that the indemnifying clause was valid.


  • The court granted the gas station lessee's petition to transfer the appeal, and reversed the trial court's judgment, directing that a judgment be entered for the gas station lessee. 
  • Analogizing to sales contracts under the Uniform Commercial Code, the court found the lease provisions unconscionable and unenforceable as against public policy, noting that the gas station lessee, a man of poor education, was the party with lesser bargaining power.
The court ordered that the trial court judgment be reversed and directed that a judgment be entered for the gas station lessee.

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