O’Callaghan v. Waller & Beckwith Realty Co. (1958)


–          A woman fell and hurt herself while on the landlords property…Wanted to sue for negligence of the property, but the landlord had an exculpatory clause that takes away his liability for negligence of his tenants…

–          Plaintiff

  • Argues that such a clause is contrary to public policy in lease of residential property
  • Shortage of housing disparity of bargaining power between the lessors or residential property that gives landlords and unconscionable advantage which is contrary to public policy
    • Court
      • No attempt to that she was concerned about the clause
      • Didn’t try to negotiate the clause, or eliminate it.
      • Or showed any effort to rent elsewhere.

–          Court

  • Generally refuses to enforce (exculpatory) contracts between merchants. i.e. shippers, masters and servants (public issues, vs. tenants which are private issues – thus not public policy).
  • May benefit a tenant and landlord?
    • Transfers the risk of financial burden – induce a better standard of care.

Procedural History

–          Trial court ruled in favor of O‘Callaghan.

–          Appellate court ruled in favor of Waller because of exculpatory clause in the lease that barred negligence.

–          Supreme Court of Illinois.


–          Does the exculpatory clause in the lease that forbids liability upon the landlord enforceable?


–          YES – However, I believe that this is an “old” way of looking at things.


–          An exculpatory clause is enforceable for private transactions where one that is between businessmen or merchants that there is a greater chance of injury, exculpatory clauses for negligent harm are not allowed.



–          Focusing on shortage of housing; the legislation has already made a number of statutes in this area and if they didn’t mention this problem, the courts assume that it wasn’t much of an issue.

  • Court feels like its being asked augment the legislative response to the housing shortage and that it was inadequate and incomplete.

–          Tennant-landlord does not have the same type of relationship between merchants and vessels, and businessmen where the exculpatory clause has been permitted.

  • Thousands of landlords who are in competition with each other .
  • The use of a form contract does not of itself establish disparity of bargaining power.
  • Cannot take into account sporadic and transitory situations.
  • Weighing heavily towards legislative action, not judicial…


–          Affirmed appellate court’s decision.


–          Very similar to the 21 year old lemon car case – arguing public policy is too tough for the judicial system to overturn…judges tend to side with the legislation versus one plaintiff even if morally right!

–          Dissenting opinion (believe is moving towards unconscionability of power between landlord and tenant.

  • Even though the tenant did not bargain the exculpatory clause…
    • Evidence shows that if the tenant did not agree, they would not get the apartment…there were waiting lists for apartments so potential tenants did not want to argue…the were in a powerless position…
  • These types of exculpatory clauses were included in all leases, so even if a potential tenant wanted to not agree to it, it’s pretty likely that the next tenant would have the same clause…
    • It is not a private matter, its public policy…

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