CAZA Drilling (California), Inc. v. TEG Oil & Gas U.S.A., Inc.
California Court of Appeal
12 Cal. Rptr. 3d 175 (Cal. Ct. App. 2004)
TEG Oil & Gas (defendant) hired CAZA Drilling (plaintiff) to drill an oil well under a contract making TEG solely responsible for consequences of operations except for obligations CAZA specifically assumed, such as damage to its own equipment and injuries to its own employees; after a blowout destroyed the well, CAZA sued TEG for breach of contract, and TEG cross-claimed alleging CAZA's negligence caused the blowout. CAZA moved for summary judgment on the cross-claim based on the contract's exculpatory clause, which the trial court granted, and TEG appealed.
Whether an exculpatory clause in a services contract that relieves a party from the consequences of its own negligence is enforceable when the contract does not implicate the public interest.